What is the total opportunity cost for a month based

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Reference no: EM131988420

The Smythe firm expects a total cash need of $9,000 over the next 4 months. They have a beginning cash balance of $1,000, and cash is replenished when it hits zero.

The fixed cost of selling securities to replenish cash balances is $4.00. The interest rate on marketable securities is 8% per annum.

There is a constant rate of cash disbursement and no cash receipts during the month. What is the total opportunity cost for a month based on the firm's current practice?

Reference no: EM131988420

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