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16. Equivalent annual annuities Another method to deal with the unequal life problem of projects is the equivalent annual annuity (EAA) method. In this method

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16. Equivalent annual annuities 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 underthealternativeinvestmentsareconvertedintoaconstantcashflowstreamwhoseNPVisequivalenttotheNPVofthecomparativeprojectsinitia stream. (NPV) of $85647. Blue Moose Home Builders can replicate this project indefinitely. The equivalent annual annuity (EAA) for this project is The EAA approach to evaluating projects with unequal lives do a good job of taking inflation into account

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