The balance sheet and income statement of the Grow 'n' Glow Manufacturing Company during 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     $ 19,000

         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%                     

           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. 17.6%

B. 15%

C. 67.8%

D. 27.4%