Assessment 5: (Algo) Glaze Manufacturing Company (GMC) is considering... LO 16-2

Assessment 5: (Algo) Glaze Manufacturing Company (GMC) is considering... LO 16-2 Glaze Manufacturing Company (GMC) is considering an opportunity to invest in a new plece of equipment. The equipment costs $53,000 with $33,000 due on the date of purchase and the remaining $20,000 due at the end of year three. The equipment is expected to have a 5 year useful life. GMC's accountant has developed the following cash flow Information regarding the equipment. Purchase price of the equipment due up front Remaining balance due at end of year 3 Additional working capital required immediately upon purchase Salvage value Incremental income per year Working capital recovery at end of useful life $33,000 $20,000 5,300 11,500 16,500 $ 5,300 Assuming a required (desired) rate of return of 12%, the net present value of this Investment opportunity is (Use the PV of $1 and PVA of $1 tables) (Round Intermediate and final answer to the nearest whole dollar.) Multiple Choice $16,475. O O $52,536 O $69,011 $189.951