Lloyd Inc. has sales of $300,000, a net income of $18,000, and the following balance sheet:

Cash	$49,980		Accounts payable	$58,650
Receivables	97,920		Notes payable to bank	40,290
Inventories	224,400		Total current liabilities	$98,940
Total current assets	$372,300		Long-term debt	62,730
Net fixed assets	137,700		Common equity	348,330
Total assets	$510,000		Total liabilities and equity	$510,000

1.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, 2.25x, without affecting sales or net income. If inventories are sold and not replaced (thus reducing the current ratio to 2.25x); 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. %

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