The Timberline Firm Expects a Total Need of €12,500 Over

The Timberline firm expects a total need of €12,500 over the next 3 months.They have a beginning cash balance of €1,500,and cash is replenished when it hits zero.The fixed cost of selling securities to replenish cash balances is €3.50.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. Using the Baumol model,what is the optimum cash holding?

A) €362.28
B) €1,045.83
C) €1,251.86
D) €3,613.82
E) None of the above.