You have the following information from 2020 and are looking to forecast 2021. In 2021 you expect sales to be equal to $11 million. Assume the payout ratio is 40%. Using the "Percent-of-Sales" method, what amount of Retained Earnings will the company generate in 2021?

Account	2020 Information
Costs (excluding Depreciation)	74% of Sales
Depreciation	6% of Sales
Cost of Debt	7%
Debt	$20 million
Taxes	1.5% of Sales
Tax rate	25%