"Equivalent Annual Annuity. Econo-Cool air conditioners cost $300 to purchase, result in electricity bills of $150 per year, and last for five years. Luxury Air models cost $500, result in electricity bills of $100 per year, and last for eight years. The discount rate is 21%. (LO8-5)

What is the equivalent annual cost of the Econo-Cool model? What is the equivalent annual cost of the Luxury Air model? Which model is more cost-effective? Now you remember that the inflation rate is expected to be 10% per year for the foreseeable future. Redo parts (a) and (b)."