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You go to the store to buy a new kitchen and you are offered two...

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Finance

You go to the store to buy a new kitchen and you are offered two options. You could buy an Induction kitchen that cost $4,500, its expected to have a life of eight years, and will have an average consumption of electricity (cost) of $1,600 a year. Or you could buy a conventional gas/ stove that cost only $1,200, but will last only for four year; however, its consumption costs would only be of $660 a year. If the discount rate is 9%, what is the equivalent annual cost (EAC) of the two products? And which option would you choose?

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