Lloyd Inc. has sales of $$700,000,$ a net income of $$70,000,$ and the following balance sheet:

Cash $ $108,640$ Accounts payable $ $96,320$

Receivables $137,760$ Notes payable to bank $63,840$

Inventories $481,600$ Total current liabilities $ $160,160$

Total current assets $ $728,000$ Long$-$term debt $175,840$

Net fixed assets $392,000$ Common equity $784,000$

Total assets $ $1,120,000$ Total liabilities and equity $ $1,120,000$

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, $1\mathrm{.}75\backslash$times $,$ without affecting sales or net income. If inventories are sold and not replaced $($thus reducing the current ratio to $1\mathrm{.}75\backslash$times $),$ 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 $($increase or decrease$)$ by $($how many$)$ percentage points.

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