eBook Problem Walk-Through Lloyd Inc. has sales of $250,000, a net income of $15,000, and the following balance sheet: Cash $39,375 Accounts payable $56,700 Receivables 97,650 Notes payable to bank 22,050 Inventories 189,000 Total current liabilities $78,750 Total current assets $326,025 Long-term debt 77,175 Net fixed assets 198,975 Common equity 369,075 Total assets $525,000 Total liabilities and equity $525,000 The new owner thinks that inventories are excessive and can be lowered to the point where the current ratio is equal to the industry average, 2.5x, without affecting sales or net income. If inventories are sold and not replaced (thus reducing the current ratio to 2.5x); if the funds generated are used to reduce common equity (stock can be repurchased at book value); and if no other changes occur, by how much will the ROE change? Do not round intermediate calculations. Round your answer to two decimal places. 8.86 % What will be the firm's new quick ratio? Do not round intermediate calculations. Round your answer to two decimal places. 1.74