A New, More Efficient Machine Will Last 4 Years and Allow

Multiple Choice

A new, more efficient machine will last 4 years and allow inventory levels to decrease by $100,000 over its life. At a cost of capital of 13%, how does the net working capital change affect the project's NPV?

A) NPV increases by $38,668.13.
B) NPV increases by $61,330.09.
C) NPV will not change.
D) NPV increases by $100,000.