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 Acmes 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