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There is a nylon adjustment bolt located behind the front left wheel. You will see the clutch cable coming out of it. Simply turn the adjustment bolt counter-clockwise a few turns. After you adjust it, make sure that the first inch of pedal travel or so is noticably easier than the rest. This is so that the clutch is fully engaged with your foot off the pedal. These cables can break with time. Mine finally went on my '86 740 last month. It is a bit of a pain to install a new one. I think that the haynes manual has more info on clutches in these cars.
-Steve
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