Bagamery Inc. has the following balance sheet:

Cash

$ 36,000

Accounts payable

$ 75,000

Receivables

110,150

Other current liabilities

52,150

Inventories

175,000

Long-term debt

187,500

Net fixed assets

300,000

Common equity

306,500

Total assets

$621,150

Total liabilities & equity

$621,150

Last year the firm had $42,500 of net income on $550,000 of sales.However, the new CFO thinks that inventories are excessive and could be lowered sufficiently to cause the current ratio to equal the industry average, 2.2, without affecting either sales or net income.Assume inventories are sold off and not replaced to get the current ratio to 2.2, and the funds generated are used to buy back common stock at book value without changing anything else.What is the ROE after these changes are made?

a.16.03%

b.16.57%

c.17.08%

d.17.88%

e.18.50%