Match the terms relating to the basic terminology and concepts of personal finance on the left with the descriptions of the terms on the right. Read each description carefully and type the letter of the description in the Answer column next to the correct term These are not necessarily complete definitions, but there is only one possible answer for each term Term Answer Description A. To qualify for exclusion during this transaction, you must have owned and Gross income ▼ occupied for two of the five prior years B. This term essentially includes all income subject to federal tax Active income Portfolio income C. Using taxable income, it is based on tax tables or tax rate schedules Passive income D. This term includes expenses that can only offset portfolio income. E. This is used to offset passive income Investment expenses F. This term includes income from self-employment Real estate or limited partnership expenses Capital gains G. This item is taxed at different rates depending on the holding period Sale of a home A TH, This is used to determine tax liability Taxable income I. This term includes income gained from real estate and limited partnerships ▼ Tax liability CJ. This term refers to earnings and capital gains generated from investment holdings

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