The comparative balance sheets of Apollo Rocket, Inc. show a net increase in inventory of $77,000 and a net decrease in accounts payable of $41,000 during 2015. In computing net cash flow from operating activities under the indirect method, net income for 2015 should be:

Increased by $118,000.

Reduced by $118,000.

Reduced by $36,000.

Increased by $36,000.