Your Firm Spends $54,000 a Week to Pay Bills and Maintains

Your firm spends $54,000 a week to pay bills and maintains a lower cash balance limit of $45,000. The standard deviation of your disbursements is $12,100. The applicable interest rate is 4.5 percent and the fixed cost of transferring funds is $55. What is your opportunity cost of holding cash based on the BAT model?

A) $1,318
B) $1,864
C) $2,204
D) $2,311
E) $3,709