The following information is for SimClo Inc.

Partial Balance Sheet:
Cash	20
Accounts receivable	1,000
Inventories	2,000
Total current assets	3,020
Net fixed assets	2,980
Total assets	6,000
Income Statement:
Sales	10,000
Cost of goods sold	8,000
EBIT	2,000
Interests	400
EBT	1,600
Taxes	640
Net Income	960
tax rate	40%
Interests rate on outstanding debt	10%
Industry measures:
Days Sales Outstanding (DSO):	40
Inventory turnover:	5

SimClo Inc. plans to change its inventory policy so as to cause its inventory turnover to be equal to the industry average, and this change is expected to have no effect on either sales or cost of goods sold. If the cash generated from reducing inventories is used to retire debt (which was outstanding all last year), what will SimClo's new debt-to-assets ratio be after the change in inventory turnover is reflected in the balance sheet?

	60.00%
	64.29%
	62.50%
	55.56%
	46.43%
	43.33%
	43.75%
	38.89%