Lloyd Inc. has sales of $100,000, a net income of $11,000, and the following balance sheet:

Cash	$	13,000		Accounts payable	$	31,200
Receivables		39,780		Notes payable to bank		9,360
Inventories		137,800		Total current liabilities	$	40,560
Total current assets	$	190,580		Long-term debt		47,060
Net fixed assets		69,420		Common equity		172,380
Total assets	$	260,000		Total liabilities and equity	$	260,000

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, 2.5, without affecting sales or net income. If inventories are sold and not replaced (thus reducing the current ratio to 2.5), 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-increasedecreaseItem 1 by percentage points.

What will be the firm's new quick ratio? Do not round intermediate calculations. Round your answer to two decimal places.