a]
EAC = (NPV * r) / (1 - (1 + r)-n),
where NPV = net present value
r = discount rate
n = number of years
NPV is calculated as the sum of present values of each cash flow
EAC = -$279.62
b]
EAC = (NPV * r) / (1 - (1 + r)-n),
where NPV = net present value
r = discount rate
n = number of years
NPV is calculated as the sum of present values of each cash flow
EAC = -$267.63
c]
Luxury Air is more cost-effective as it has a lower EAC
d-1]
Electricity bills of each year are adjusted for inflation.
EAC of Econo-Cool is -$308.06
EAC of Luxury Air is -$303.84
d-2]
Luxury Air is more cost-effective as it has a lower EAC
Econo-Cool air conditioners cost $350 to purchase, result in electricity bills of $160 per year, and...
Econo-Cool alr conditioners cost $350 to purchase, result In electricity bills of $160 per year, and last for 5 years. Luxury Air models cost $550, result in electricity bills of $120 per year, and last for 8 years. The discount rate Is 21% a. What Is the equivalent annual cost of the Econo-Cool model? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Econo-Cool Equivalent annual cost b. What Is the equivalent annual cost of the Luxury...
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URGENT!!!
Econo-Cool air conditioners cost $355 to purchase, result in electricity bills of $161 per year, and last for 5 years. Luxury Air models cost $555, result in electricity bills of $122 per year, and last for 8 years. The discount rate is 20%. a. What is the equivalent annual cost of the Econo-Cool model? (Do not round Intermediate calculations. Round your answers to 2 decimal places.) Econo-Cool Equivalent annual cost b. What is the equivalent annual cost of the...
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Econo-Cool air conditioners cost $320 to purchase, result in electricity bills of $154 per year, and last for 5 years. Luxury Air models cost $520, result in electricity bills of $108 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.) Econo-Cool Equivalent annual cost b. What is the equivalent annual cost of the Luxury...
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