Marc and Michelle are married and earned salaries this year of $71,600 and $14,850, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $1,450 from corporate bonds. Marc contributed $3,450 to an individual retirement account, and Marc paid alimony to a prior spouse in the amount of $2,450. Marc and Michelle have a 10-year-old son, Matthew, who lived with them throughout the entire year. Thus, Marc and Michelle are allowed to claim a $2,000 child tax credit for Matthew. Marc and Michelle paid $7,900 of expenditures that qualify as itemized deductions and they had a total of $6,710 in federal income taxes withheld from their paychecks during the course of the year. (Use the tax rate schedules.) a. What is Marc and Michelle's gross income?
Description Amount
Corporate bond interest
Marc's salary
Michelle's salary
Gross income
b. What is Marc and Michele's adjusted gross income?

The gilbert instrument corporation is considering replacing the wood steamer it currently uses to shape guitar sides. the steamer has 6 years of remaining life. if kept,the steamer will have depreciaiton expenses of $650 for five years and $325 for the sixthyear. its current book value is $3,575, and it can be sold on an internet auction site for$4,150 at this time. if the old steamer is not replaced, it can be sold for $800 at the endof its useful life. gilbert is considering purchasing the side steamer 3000, a higher-end steamer, whichcosts $12,000 and has an estimated useful life of 6 years with an estimated salvage value of$1,500. this steamer falls into the macrs 5-year class, so the applicable depreciationrates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. the new steamer is fasterand allows for an output expansion, so sales would rise by $2,000 per year; the newmachine's much greater efficiency would reduce operating expenses by $1,900 per year.to support the greater sales, the new machine would require that inventories increase by$2,900, but accounts payable would simultaneously increase by $700. gilbert's marginalfederal-plus-state tax rate is 40%, and its wacc is 15%.a. should it replace the old steamer? b. npv of replace = $2,083.51