Selecto one:

a. an increase of $6000

b. an increase of $3750

c. an increase of $250

d. an increase of $712500

Net income $60,000 + Depreciation +$6,000 - Capital Expenditures -$7,000 - Increases in Working Capital -$2,000 =Free Cash Flow $57,000 Vega Music's projected net income and free cash flows are given above in thousands of dollars. Vega expects their free cash flows to increase by 5% per year. If Vega were able to reduce its annual increase in working capital by 15% without affecting the growth rate of their free cash flows, what would be the effect of this reduction on Vega's value given a cost of capital of 13%