The Malkiel Corporation has made the three-year projection of its asset investment given in the following table. It has found that payables and accruals tend to equal one third of current assets. It currently has $50 million in equity, and the remainder of its financing is provided by long-term debt. The earnings retained amount to $1 million per quarter.

a. Graph the time path of (i) fixed assets and (ii) total assets (less amount financed spontaneously by payables and accruals).
b. Devise a financing plan, assuming that your objective is to use a hedging (maturity matching) approach.

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FIXED ASSETS CURRENT ASSETS DATE (in millions) (in millions) 3/31/X1 (now) $50 $21 6/30/X1 51 30 9/30/X1 52 25 12/31/X1 53 21 3/31/X2 54 22 6/30/X2 55 31 9/30/X2 56 26 12/31/X2 57 22 3/31/X3 58 23 6/30/X3 59 32 9/30/X3 60 27 12/31/X3 61 23 FIXED ASSETS CURRENT ASSETS DATE (in millions) (in millions) 3/31/X1 (now) $50 $21 6/30/X1 51 30 9/30/X1 52 25 12/31/X1 53 21 3/31/X2 54 22 6/30/X2 55 31 9/30/X2 56 26 12/31/X2 57 22 3/31/X3 58 23 6/30/X3 59 32 9/30/X3 60 27 12/31/X3 61 23