Honey Industries has $4 billion in sales and $1.6 billion in fixed assets. Currently, the company's fixed assets are operating at 90% of capacity.
1. What level of sales could Honey Industries have obtained if it had been operating at full capacity? Round your answer to the nearest cent.
2. What is Honey's target fixed assets/Sales ratio? Round your answer to two decimal places.
3. If Honey's sales increase 12%, how large of an increase in fixed assets will the company need to meet its Target fixed assets/Sales ratio? Round your answer to the nearest cent.