On December 31, 2017, Kessler Company granted some of its executives options to purchase 60,000 shares of the company's $10 par common stock at an option price of $100 per share. The options become exercisable on January 1, 2021.

The Black-Scholes option pricing model estimates the options to be worth $480,000. At December 31, 2018, none of the executives had exercised their options. What is the impact on Kessler's net income for the year ended December 31, 2018 as a result of this transaction under the fair value method?

a. $160,000 increase

b. $160,000 decrease

c. $0 decrease

d. $480,000 decrease