Ouch, that hurts.
The bigger question that I see is how was your daughter able to get away with this? Your business might be missing some basic financial controls. No matter what you decide to do about this situation, discuss the theft with an accountant or consultant and figure out how to prevent this again in the future. There are many innovative ways to fit any business. No matter how small.
As far as your daughter goes, personally, I would be willing to give her another chance as long as the financial controls and additional supervision were in place unless she had a long history of drub abuse or dishonesty. But as you can see from the other responses, this is a touchy subject and my opinion is in the minority.
Financial controls are not foolproof (Enron, Worldcom, etc.) so it really depends on the people involved.
Tom Cox, Consultant
Working with innovative and eccentric technology companies: www.kentwoodconsulting.com