The balance sheet and income statement of the Grow 'n' Glow Manufacturing Company for the past year are as follows (000 omitted):

BALANCE SHEET

Assets                                                           Liabilities  

Cash                              $   9,700                    Accounts payable   $    3,000

Accounts receivable                  15,300                    Notes payable          10,000

Inventory                            18,500                    Accrued liabilities         6,000

Total current assets               $  43,500                    Total current liabilities   $  27,900

Held-to-maturity securities        $  45,600                    Long-term debt     $  35,600

Net fixed assets                      32,200                    Total liabilities     $  54,600

Total long-term assets            $  77,800      

                                                                 Equity   

    Total assets                   $121,300                      Common stock           $ 10,000

                                                                  Additional paid-in capital   30,000

                                                                  Retained earnings          26,700

                                                                  Total equity               $ 66,700

                                                                  Total liabilities & equity   $121,300

   INCOME STATEMENT

   Net sales                       $100,000     

   Cost of goods sold                66,200     

   Gross profit                    $  33,800     

   Selling expense                   16,400     

   General & admin. expense        11,200     

     Operating income             $  6,200     

   Net interest expense            $  1,200     

   Net income before tax           $  5,000     

   Taxes @ 35%                       1,750     

   Net income                      $  3,250     

The company paid dividends during the past year of $975. During the past year, fixed assets were being used at 85% of capacity. In all other respects, the company was operating at full capacity.

Assuming the company's dividend policy is that dividends will grow at a rate of 4% per year, by what percentage could next year's sales increase over the past year's sales without the company needing to increase its fixed assets?

A. 15%

B. 17.6%

C. 27.4%

D. 67.8%