Econo-Cool air 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 are the equivalent annual costs of the Econo-Cool and Luxury Air models? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Equivalent annual cost
Econo-Cool	$
Luxury Air	$

Which model is more cost-effective?

*Econo Cool

*Luxury Air

Now you remember that the inflation rate is expected to be 10% per year for the foreseeable future. What are the equivalent annual costs of the Econo-Cool and Luxury Air models? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Equivalent annual cost
Econo-Cool	$
Luxury Air	$

Which model is more cost-effective?

*Econo Cool

*Luxury Air