eBook Problem Walk-Through Lloyd Inc. has sales of $400,000, a net income of $44,000, and the following balance sheet: Cash $ 128,800 Accounts payable $ 133,280 Receivables 154,560 Notes payable to bank 66,080 Inventories 414,400 Total current liabilities $ 199,360 Total current assets $ 697,760 Long-term debt 140,000 Net fixed assets 422,240 Common equity 780,640 Total assets $1,120,000 Total liabilities and equity $1,120,000 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, 1.75x, without affecting sales or net income. If inventories are sold and not replaced (thus reducing the current ratio to 1.75x), 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. ROE will -Select- vby percentage points. What will be the firm's new quick ratio? Do not round intermediate calculations. Round your answer to two decimal places.