Question 3 (3 points) After calculating the NPV of a project, an analyst shows the calculation and results to the plant manager. The plant manager notes that the cost of the equipment included in the initial investment is based on an old estimate and should be increased to reflect current prices. Further, due to increased inflation expectations, the firm's required rate of return has increased since the original estimates were gathered. When the analyst makes these adjustments, the NPV: will be higher, since both changes will increase NPV will be lower, since both changes will reduce NPV O may be higher or lower, since increasing the initial investment will reduce NPV, but increasing the required return will increase NPV may be higher or lower, since increasing the initial investment will increase NPV, but increasing the required return will decrease NPV