When evaluating capital budgeting projects, what wil be the effects of forgetting to refect a decrease in inventory at the beginning of

the project on $($a$)$ the NPV and $($b$)$ the free cash flow in the initial year?

$($a$)$ underestimated NpV; $($b$)$ smaller cash outflow

C

$$

$0$ la$)$ overestimated Npv; $($b$)$ smaller cash outflowO $($a$)$ underestimated Npv; $($b$)$ larger cash outflowO$($a$)$ the same NPv; $($b$)$ larger cash outflow$($a$)$ overestimated Npy; $($b$)$ larger cash outflow