What is the equivalent annual cost of the two products

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Reference no: EM132032673

Low-energy lightbulbs typically cost $4.30, have a life of nine years, and use about $2.40 of electricity a year. Conventional lightbulbs are cheaper to buy, for they cost only $.66. On the other hand, they last only about a year and use about $7.40 of energy.

a. If the real discount rate is 5%, what is the equivalent annual cost of the two products? (Do not round intermediate calculations. Enter your answers as a positive value rounded to 2 decimal places.)

Equivalent Annual Cost

Low-energy lightbulbs $

Conventional lightbulbs $

b. Which product is cheaper to use?

Low-energy lightbulbs

Conventional lightbulbs

Reference no: EM132032673

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