Question 9 CCC Ine has the following balance sheet and income statement data: $14.000 70,000 280,000 $364,000 Cash Receivables Inventories Total CA Net fixed assets Total assets Sales Net income 126,000 $490,000 $280,000 27,800 Accounts payable Other current liabilities Total CL Long-term debt Common equity Total liab, and equity $42,000 28,000 $70,000 140,000 280,000 $490,000 o The new CFO thinks that inventories are excessive and could be lowered sufficiently to cause the current ratio to equal the industry average, 2.25, without affecting either sales or net income. Assuming that inventories are sold off and not ed target level, and that the funds generated are used to buy back common stock at book value, by how much would the ROE change? Do not round your intermediate calculations. O a. 11.75% O b. 12.97% O c. 15.54% O d. 30.68% O e. 27.89%

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