Deep Hollow Mills Has Sales of $254,600 and a Profit

Deep Hollow Mills has sales of $254,600 and a profit margin of 5.2 percent. The firm has retained earnings of $113,200 after paying its annual dividend of $7,500. What is the pro forma retained earnings for next year if this firm grows at a rate of 3.6 percent and both the profit margin and the dividend payout ratio remain constant?

A) $117,704.74
B) $123,771.10
C) $113,592.08
D) $105,921.22
E) $119,145.81