4. You are given the following information (balance sheet & income statement): Cash Receivables Inventories Total CA Net fixed assets Total assets Sales Net income $ 14,000 70,000 280,000 $364,000 126,000 $490,000 $280,000 $ 21,000 Accounts payable Other current liab. Total CL Long-term debt Common equity Total liab. and equity $ 42,000 28,000 $ 70,000 140,000 280,000 $490,000 You believe that the company is piling up too many unnecessary inventories, so you suggest the company to reduce its inventories so that its current ratio matches with the industry average (2.75) and, at the same time, sales and net income are not affected. Suppose the excessive inventories can be easily sold on the market and proceeds from the selling are utilized to repurchase common shares at book value, what is the change in ROE? [20 points]