Question: SM . 6 3 A small company has $ 4 , 2 5 0 , 0 0 0 in ( annual ) revenue, spends 5

SM.63 A small company has $4,250,000 in (annual) revenue, spends 56% of its revenues on purchases, and has a net profit margin of 11.25%. They would like to increase their profits and they are looking at focusing in one of two directions. First, they think they can save 1.85% 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 1.85% savings to purchasing expenses? (Write your answer as a percentage, and display your answer to two decimal places.)%

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