Choice "D" is correct. Net realizable value is equal to the selling price less the estimated cost of disposal:

The inventory will be reported at the net realizable value of $388,000 because it is less than the cost of $400,000.Choice "a" is incorrect. Net realizable value less normal profit margin is not used to determine the lower of cost or net realizable value under IFRS.
Choice "b" is incorrect. Replacement cost is not used to determine the lower of cost or net realizable value under IFRS.
Choice "c" is incorrect. The inventory will not be reported at the cost of $400,000 because the cost of $400,000 is higher than the net realizable value of $388,000.