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What is the equivalent annual cost of the econo-cool model

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Reference no: EM133180776

Question - Econo-Cool air conditioners cost R500 to purchase, result in electricity bills of R250 per year, and last for 3 years. Luxury Air models cost R700, result in electricity bills of R300 per year, and last for 9 years. The discount rate is 10%.

Required -

a. What is the equivalent annual cost of the Econo-Cool model and the Luxury Air model?

b. Which model is more cost-effective?

c. Considering that the inflation rate is expected to be 15% per year for the foreseeable future. Redo parts (a) and (b).

Reference no: EM133180776

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