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Air conditioners cost $300 to purchase, result in electricity bills of $150 per year, and last for 5 years. The discount rate is 20 percent.
Air conditioners cost $300 to purchase, result in electricity bills of $150 per year, and last for 5 years. The discount rate is 20 percent. Should you replace your current air conditioner which costs $270 per year to run?
A: Do not replace - the equivalent annual cost of the new AC is $350
B: Replace - the equivalent annual cost of the new AC is $210
C: Do not replace - the equivalent annual cost of the new AC is $330
D: Replace - the equivalent annual cost of the new AC is $150
E: Replace - the equivalent annual cost of the new AC is $250
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