Assume That EEG Company Wanted to Reduce the Cost of Materials

Assume that EEG Company wanted to reduce the cost of materials handling in each of its stores, and management set a target reduction of 5 percent per year.
If a given store has current annual materials handling costs of $100,000 and expected an increase next year due to 20 percent growth, the budget for next year would be:

A) $114,000
B) $196,000
C) $230,000
D) $225,400