Lloyd Inc. has sales of $250,000, a net income of $17,500, and the following balance sheet: Cash $33,600 Accounts payable $36,000 Receivables 79,600 Notes payable to bank 12,400 Inventories 232,000 Total current liabilities $48,400 Total current assets $345,200 Long-term debt 59,600 Net fixed assets 54,800 Common equity 292,000 Total assets $400,000 Total liabilities and equity $400,000 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. a. 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. % b. What will be the firm's new quick ratio? Do not round intermediate calculations. Round your answer to two decimal places