27. Chloe Powell Inc. has the following balance sheet and income statement data: Cash Receivables Inventories $14,000 70,000 280,000 Accounts payable Other current liabilities Total CL Long-term debt Common equity Total liability and equity Total CA $364,000 Net fixed assets126,000 Total assets Sales Net Income 490,000 280,000 21,000 The new CFO thinks that inventories are excessive and could be lowered sufficiently to cause the current ratio to equal the industry average, 3.75, without affecting wither sales or net income. Assuming that inventories are sold off and not replaced to get the current ratio to the target level, and that the funds generated are used to buy back common stock as book value, by how much would the ROE change? Show every step of your calculations 27. Chloe Powell Inc. has the following balance sheet and income statement data: Cash Receivables Inventories $14,000 70,000 280,000 Accounts payable Other current liabilities Total CL Long-term debt Common equity Total liability and equity Total CA $364,000 Net fixed assets126,000 Total assets Sales Net Income 490,000 280,000 21,000 The new CFO thinks that inventories are excessive and could be lowered sufficiently to cause the current ratio to equal the industry average, 3.75, without affecting wither sales or net income. Assuming that inventories are sold off and not replaced to get the current ratio to the target level, and that the funds generated are used to buy back common stock as book value, by how much would the ROE change? Show every step of your calculations