Suppose that Wall$-$E Corporation currently has the balance sheet shown below, and that sales for the year just ended were $$7\mathrm{.}7$ million. The firm also has a profit margin of $20$ percent and a retention ratio of $25$ percent and expects sales of $$9\mathrm{.}7$ million next year. Fixed assets are currently fully utilized, and the nature of Wall$-$E$$s fixed assets is such that they must be added in $$1$ million increments.

Assets Liabilities and Equity

Current assets $ $2,618,000$ Current liabilities $ $2,233,000$

Fixed assets $4,928,000$ Long$-$term debt $1,850,000$

Equity $3,463,000$

Total assets $ $7,546,000$ Total liabilities and equity $ $7,546,000$