ASTRA Corp is a family$-$owned Business. It has been using the residual dividend model, but family members who hold most of the stock want more cash dividends, even if that means a slower future growth rate. Neither the net income nor the capital structure will change during the coming year because of a dividend policy change to the indicated target payout ratio.

Debt $60\%$

Equity $=1\mathrm{.}0-\%$ Debt $=40\%$

Capital budget under the residual dividend model $$5,000,000$

Net income $3,500,000$

Target dividend payout ratio $80\%$

By how much would the capital budget have to be cut to enable the firm to achieve the new target dividend payout ratio?