RETURN ON EQUITY AND QUICK RATIO Lloyd Inc. has sales of $400,000, a net income of $48,000, and the following balance sheet: Cash $59,160 Accounts payable $132,240 Receivables 190,240 Notes payable to bank 61,480 Inventories 556,800 Total current liabilities $ 193,720 Total current assets $806,200 Long-term debt 167,040 Net fixed assets 353,800 Common equity 799,240 Total assets $1,160,000 Total liabilities and equity $1,160,000 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, 2x, without affecting sales or net income. a. If inventories are sold and not replaced (thus reducing the current ratio to 2x); 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