Gas heaters cost $10,000 to purchase, result in yearly gas bills of $1,000, and last 6 years. Electric heaters cost $6,000 to purchase, result in yearly electric bills of $2,300, and last for 10 years. The discount rate is 12 percent per year. Having calculated the equivalent annual costs for the gas and electric heaters, which heater is more cost effective?

A) The electric heater is more effective because it has the lower EAC.

B) The gas heater is more effective because it has a lower EAC.

C) Cannot tell which is more effective from an EAC analysis.