The correct answer is C) Reduces engine horsepower. Heated intake air reduces the density of the air entering the engine's cylinders. This means less oxygen is available for combustion, which in turn reduces the amount of fuel that can be burned. As a result, the engine's horsepower output is decreased. Increased intake air temperature also reduces the engine's overall efficiency and thermal efficiency. The other answer choices are incorrect because: A) Increases engine horsepower is opposite to the actual effect, B) Increases efficiency is also incorrect as heated intake air reduces efficiency, and D) Increases engine life is not a direct consequence of heated intake air.