A New, More Efficient Machine Will Last Four Years and Allow

Multiple Choice

A new, more efficient machine will last four years and allow inventory levels to decrease by $100,000 during its life.At a cost of capital of 13 percent, how does the net working capital change affect the project's NPV?

A) NPV increases by $38,668
B) NPV increases by $61,330
C) NPV increases by $100,000
D) NPV increases by $138,668