Debt and Credit Bookkeepers needs a total of $21,000 in cash during the year for transactions and other purposes. Whenever the cash runs low, its sells $1,500 in securities and transfers the money to its cash account. The interest rate is 4% per year. Selling securities has a flat cost or $25 per sale.

1) How much is the opportunity cost under the current policy?

2) How much are the trading cost and total cost?

3) Comment on the current policy?

4) How much is the target cash balance using the BAT Model?

**Could there be not enough information to solve this problem?**