A small company has $7,000,000 in (annual) revenue, spends 52% of its revenues on purchases, and has a net profit margin of 6.25%. They would like to increase their profits and they are looking at focusing in one of two directions. First, they think they can save 1.25% on their purchase expenses. Or second, they can focus on increasing sales.
By how many dollars would they have to increase sales in order to equal a 1.25% savings to purchasing expenses?