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Overview: Wicked Good Cupcakes (WGC) expanded one year ago with the purchase of 3 baking/packaging systems. A vendor, Acme Baking, has suggested that there would be significant cost savings by the purchasing and installation of their newer integrated baking technology. The existing systems and Acme's proposed integrated baking technology have an expected useful life of 10 years, with no salvage value. The WGC tax rate is 45%, and their IRR is 10%. Here is a summary of the financials: Present System Acme Baking Gross Profit $600,000 $1,200,000 Less Depreciation $300,000 $450,000 Profit before tax $300,000 $750,000 Tax @ 45% $135,000 $338,000 Profit After Tax $ 165,000 $412,000 Add Depreciation $300,000 $450,000 After Tax cash flow $465,000 $862,000 Instructions: Based on the unit's material and what you have read above: 1. Should WGC invest in Acme's technology? Why or why not? Base your decision on determining the Net Present Value (NPV) as well as the difference in cash flows between the present system and Acme's new technology. 2. Does the increase in Gross Profit alone justify the new technology? Why or why not? Requirements: . . Two to three-pages, excluding the Title and Reference pages. All questions posed must be addressed completely. APA format, including in-text citations for referenced works. . Be sure to read the criteria, by which your assignment will be evaluated, before you write, and again after you write. Evaluation Rubric for CapEx Replacement Assignment CRITERIA Cash Flow and NVP Comparison Exemplary (14 - 15 Points) The cash flow statement is clearly presented, including all key details. Deficient (0 - 9 Points) Does not provide the cash flow statement, or the overview is missing key details. Net Present Value Analysis (23 - 25 Points) The evaluation of net present value is clearly presented including all key details. (0 - 15 Points) Analysis is inadequate or missing Proficient (10 - 13 Points) The cash flow statement is presented, though key details may not be clearly or completely presented. (16-22 Points) The evaluation of net present value is presented, though key details may not be clearly or completely presented. The evaluation of cash flows is presented, though key details may not be clearly or completely presented The evaluation of gross profit in both scenarios is presented, though key details may not be clearly or completely presented Cash Flows Analysis The evaluation of cash flows is clearly presented, including all key details Analysis is inadequate or missing. Gross Profit In Both Scenarios Analysis The evaluation of gross profit in both scenarios is clearly presented, including all key details. Analysis is inadequate or missing