A divisional manager submitted a project proposal to the chief financial officer, complete with a calculated NPV for the project. The chief financial officer studied the proposal and pointed out that the divisional manager had failed to account for a one$-$time increase in net working capital of $$60,000$ that will be required over the life of the seven$-$year project. Assuming the full value of net working capital will be recovered at the end of the project, how will the project$$s NPV change after making the chief financial officer$$s adjustment? Assume a discount rate of $9\%.$

Multiple Choice

The NPV will not be affected.

None of the options are correct.

The NPV will decrease by $$32,822.$

The NPV will decrease by $$60,000.$

The NPV will decrease by $$16,411.$