Lloyd Inc. has sales of $400,000, a net income of $44,000, and the following balance sheet:

Cash	$	128,400		Accounts payable	$	98,400
Receivables		166,800		Notes payable to bank		79,200
Inventories		708,000		Total current liabilities	$	177,600
Total current assets	$	1,003,200		Long-term debt		184,800
Net fixed assets		196,800		Common equity		837,600
Total assets	$	1,200,000		Total liabilities and equity	$	1,200,000

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.