Educational Toys, Inc. (ETI) has highly seasonal sales and financing requirements. The company's balance sheet on December 31, 2012, is as follows:

ETI has made the following projections of its asset needs and net additions to retained earnings (that is, equity) for the next 3 years:

Assuming that ETI does not plan to sell any preferred or new common stock over the next 3 years:
a. Determine ETI's quarterly total assets and total (short-term and long-term) debt requirements for the next 3 years.
b. Plot the firm's fixed, current, and total assets over time on a graph.
c. Assume that ETI follows a matching approach in financing its assets. In other words, long-term debt will be used to finance its fixed and permanent current assets, and short-term debt will be used to finance its fluctuating current assets.
The costs of short-term and long-term debt to ETI under this plan are 6 and 8 percent per annum (that is, 1.5 and 2% per quarter), respectively. Using this information, determine the following:
The amount of short-term and long-term debt outstanding each quarter. • ETI's total interest costs over the 3-year period under this approach
d. Finally, ETI is also considering an aggressive policy. Under this policy, the company would determine its minimum debt requirements for the coming year on December 31 of each year and finance one-half of this amount with long term debt, with the remainder being financed by short-term debt. The costs of short-term and long-term debt under this policy are 6 and 8 percent per annum, respectively. Using this information, determine the following:
The amount of short-term and long-term debt outstanding each quarter ETI's total interest costs over the 3-year period under this aggressive policy

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Assets in Millions of Dollars) Liabilities and Equity (in Millions of Dollars) Short-term debt Long-term debt Net worth (equity) Total liabilities and equity Current assets Fixed assets Total assets S20 30 $54 S54 Fixed Assets in Millions of Dollars) Current Assets (in Millions of Dollars) Net Additions to Retained Earnings in Millions of Dollars) Year Quarter 1 (March 31) 2 (June 30) 3 (September 30) 4 (December 31) 1 (March 31) 2 (June 30 3 (September 30) 4 (December 31) 1 (March 31) 2 (June 30 3 (September 30) 4 (December 31) 2013 36 36 36 38 38 38 38 24 24 24 28 36 2014 2015 38