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Bannister Legal Services generated $ 2 . 0 million in sales during 2 0 0 7 , and its year - end total assets were

Bannister Legal Services generated $2.0 million in sales during 2007, and its year-
end total assets were $1.5 million. Also, at year-end 2007, current liabilities were
$500,000, consisting of $200,000 of notes payable, $200,000 of accounts payable,
and $100,000 of accruals. Looking ahead to 2008, the company estimates that itsassets must increase by 75 cents for every $1 increase in sales. Bannisters profit
margin is 5%, and its payout ratio is 60%. How large a sales increase can the com-
pany achieve without having to raise funds externally?

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