eBook Problem Walk-Through Lloyd Inc. has sales of $400,000, a net income of $24,000, and the following balance sheet: Cash $ 127,600 Receivables Inventories $ 106,720 Accounts payable 209,960 Notes payable to bank 591,600 Total current liabilities Total current assets $ 908,280 Long-term debt Net fixed assets 251,720 Common equity Total assets $1,160,000 Total liabilities and equity 60,320 187,920 177,480 794,600 $1,160,000 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- by percentage points. What will be the firm's new quick ratio? Do not round intermediate calculations. Round your answer to two decimal places. x