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Econo-Cool air conditioners cost $430 to purchase, result in electricity bills of $280 per year,...

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Finance

Econo-Cool air conditioners cost $430 to purchase, result in electricity bills of $280 per year, and last for five years. Luxury Air models cost $630, result in electricity bills of $230 per year, and last for eight years. The discount rate is 21%.

  1. What is the equivalent annual cost of the Econo-Cool model? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

  2. What is the equivalent annual cost of the Luxury Air model? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

  3. Which model is more cost-effective?

  4. If the inflation rate is expected to be 10% per year for the foreseeable future. What is the equivalent annual cost of the Econo-Cool model and Luxury Air model? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

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