Econo-Cool air conditioners cost $370 to purchase, result in electricity bills of $164 per year, and...

 

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Econo-Cool air conditioners cost $370 to purchase, result in electricity bills of $164 per year, and last for 5 years. Luxury Air models cost $570, result in electricity bills of $128 per year, and last for 8 years. The discount rate is 25%. a. What is the equivalent annual cost of the Econo-Cool model? (Do not round intermediate calculations. Round your answers to 2 decimal places.) ✓ Answer is complete and correct. Equivalent annual cost Econo-Cool $ 301.58 b. What is the equivalent annual cost of the Luxury Air model? (Do not round intermediate calculations. Round your answers to 2 decimal places.) ✓ Answer is complete and correct. Luxury Air 300.00 Equivalent annual cost $ c. Which model is more cost-effective? Econo-Cool ⒸLuxury Air ✔ d-1. Now you remember that the inflation rate is expected to be 10% per year for the foreseeable future. What is the equivalent annual cost of the Econo-Cool and Luxury Air model? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Equivalent annual cost Econo-Cool d-2. Which model is more cost-effective? Econo-Cool ⒸLuxury Air ✔ Luxury Air Econo-Cool air conditioners cost $370 to purchase, result in electricity bills of $164 per year, and last for 5 years. Luxury Air models cost $570, result in electricity bills of $128 per year, and last for 8 years. The discount rate is 25%. a. What is the equivalent annual cost of the Econo-Cool model? (Do not round intermediate calculations. Round your answers to 2 decimal places.) ✓ Answer is complete and correct. Equivalent annual cost Econo-Cool $ 301.58 b. What is the equivalent annual cost of the Luxury Air model? (Do not round intermediate calculations. Round your answers to 2 decimal places.) ✓ Answer is complete and correct. Luxury Air 300.00 Equivalent annual cost $ c. Which model is more cost-effective? Econo-Cool ⒸLuxury Air ✔ d-1. Now you remember that the inflation rate is expected to be 10% per year for the foreseeable future. What is the equivalent annual cost of the Econo-Cool and Luxury Air model? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Equivalent annual cost Econo-Cool d-2. Which model is more cost-effective? Econo-Cool ⒸLuxury Air ✔ Luxury Air

Answer rating: 100% (QA)

For calculation of Equivalent Annal Cost first we calculate the Net Present ValueNPV of the project ... View the full answer