Your Firm Spends $150,000 a Week to Pay Bills and Maintains

Your firm spends $150,000 a week to pay bills and maintains a lower cash balance limit of $45,000. The standard deviation of your disbursements is $10,000. The applicable interest rate is 6 % and the fixed cost of transferring funds is $35. What is your total cost of holding cash based on the BAT model?

A) $1,431
B) $2,862
C) $3,034
D) $4,912
E) $5,724