# Econo-cool air conditioners | Business & Finance homework help

Econo-Cool air conditioners cost \$1,400 to purchase, result in electricity bills of \$700 per year, and last for 6 years. Luxury Air models cost \$1,600, result in electricity bills of \$230 per year, and last for 9 years. The discount rate is 21%. a. What
are the equivalent annual costs of the Econo-Cool and Luxury Air models? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Econo-cool costs \$1,400 and lasts for 6 years. The annual rental fee with the same PV is \$ The equivalent
annual cost of owning and running Econo-cool is \$ Luxury Air costs \$1,600, and lasts for 9 years. Its equivalent annual rental fee is found as \$ The equivalent annual cost of owning and running Luxury Air is \$ ——————————————————————————–
b. Which model is more cost-effective? Econo-cool Luxury Air c-1. Now you remember that the inflation rate is expected to be 10% per year for the foreseeable future. What are the equivalent annual costs of the Econo-Cool and Luxury Air models? (Do not round
intermediate calculations. Round your answers to 2 decimal places.) Equivalent annual real cost to own Econo-cool \$ Plus \$700 (real operating cost) 700.00 ——————————————————————————– \$ ——————————————————————————–
——————————————————————————– Equivalent annual real cost to own Luxury Air \$ Plus \$230 (real operating cost) 230.00 ——————————————————————————– \$ ——————————————————————————–
——————————————————————————– ——————————————————————————– c-2. Which model is more cost-effective? Luxury Air Econo-cooL

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