What Is the Equivalent Annual Annuity (EAA)of a Project That

Multiple Choice

What is the Equivalent Annual Annuity (EAA) of a project that has an initial outlay of $2,500 followed by cash inflows of $1,000, $3,000 and $5,000 in years 1, 2 & 3 respectively? Assume a cost of capital of 11%. (Round to nearest $)

A) $1,256
B) $1,591
C) $1,838
D) $2,141