RETURN ON EQUITY AND QUICK RATIO Lloyd Inc. has sales of $450,000, a net income of $22,500, and the following balance sheet: Cash $112,455 Accounts payable $107,730 Receivables 183,330 Notes payable to bank 68,040 Inventories 463,050 Total current liabilities $175,770 Total current assets Long-term debt 154,035 $758,835 186,165 Net fixed assets Common equity 615,195 Total assets $945,000 Total liabilities and equity $945,000 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. a. 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. b. What will be the firm's new quick ratio? Do not round intermediate calculations. Round your answer to two decimal places