1. Your company has the following balance sheet (in millions of dollars):

Current assets $4.0 Accounts payable $0.8

Net property & plants 4.0 Notes payable 1.0

Accrued wages and taxes 0.2

Total current liabilities $2.0

Long-term debt 1.5

Common equity 1.5

Retained earnings 3.0

Total assets $8.0 Total liabilities and equity $8.0

You have determined the following facts: (1) this year's sales were $10 million; (2) the company will pay out 45 percent of earnings as dividends next year; (3) a net profit margin is projected at 3 percent; (4) Net property & plants were used to full capacity; and (5) all total assets as well as spontaneous liabilities as shown on the balance sheet are expected to grow proportionally with sales. Further, your CFO estimates she will need to raise $525,000 additional fund from issuing new debt or common stock next year. If the above assumptions hold, what the rate of sales growth is your CFO expecting next year? (4 points)