Lloyd Inc. has sales of $750,000, a net income of $37,500, and the following balance sheet:

Cash	$176,175		Accounts payable	$178,200
Receivables	398,925		Notes payable to bank	123,525
Inventories	810,000		Total current liabilities	$301,725
Total current assets	$1,385,100		Long-term debt	342,225
Net fixed assets	639,900		Common equity	1,381,050
Total assets	$2,025,000		Total liabilities and equity	$2,025,000

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, 2.25x, without affecting sales or net income.

1. 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. x