14. Equivalent annual annuities Aa Aa Another method to deal with the unequal life problem of projects is the equivalent annual annuity (EAA) method. In this method the annual cash flows under the alternative investments are converted into a constant cash flow stream whose NPV is equivalent to the NPV of the comparative project's initial stream Consider the case of Three Waters Boatbuilders: Three Waters Boatbuilders is considering a three-year project that has a weighted average cost of capital of 12% and a net present value (NPV) of $49,876. Three Waters Boatbuilders can replicate this project indefinitely. What is the equivalent annual annuity (EAA) for this project? O $20,766 O $23,881 O $21,804 O $25,958 An analyst will need to use the EAA approach to evaluate projects with unequal lives when the projects are