Lloyd Inc. has sales of $450,000, a net income of $36,000, and the following balance sheet:

Cash	$148,770		Accounts payable	$117,450
Receivables	244,035		Notes payable to bank	71,775
Inventories	613,350		Total current liabilities	$189,225
Total current assets	$1,006,155		Long-term debt	207,495
Net fixed assets	298,845		Common equity	908,280
Total assets	$1,305,000		Total liabilities and equity	$1,305,000

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.

1. 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. %
2. What will be the firm's new quick ratio? Do not round intermediate calculations. Round your answer to two decimal places. x