What is an equivalent annual annuity (EAA)? When and how are EAAs used in capital budgeting?

Question:

What is an “equivalent annual (EAA)?” When and how are EAAs used in capital budgeting?
Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...