What percentage would they have to increase sales

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A small company has $4,000,000 in (annual) revenue, spends 47% of its revenues on purchases, and has a net profit margin of 9.75%. They would like to increase their profits and they are looking at focusing in one of two directions. First, they think they can save 1.25% on their purchase expenses. Or second, they can focus on increasing sales.

By what percentage would they have to increase sales in order to equal a 1.25% savings to purchasing expenses? (Write your answer as a percentage and display your answer to two decimal places.)

Reference no: EM132129053

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