13. The replacement chain approach Evaluating projects with unequal lives Aa Aa Evaluating projects with unequal lives Your company is considering starting a new project in either France or Thailand-these projects are mutually exclusive, so your boss has asked you to analyze the projects and then tell her which project will create more value for the company's stockholders The French project is a six-year project that is expected to produce the following cash flows: The Thai project is only a three-year project; however, your company plans to repeat the project after three years. The Thai project is expected to produce the following cash flows: Project: French Year 0: -$800,000 Year1 $380,000 Year 2: $400,000 Year 3 $420,000 Year 4 $375,000 Year 5 $110,000 Year 6: Thai Project: Year 0: -$490,000 Year 1: $250,000 Year 2: $265,000 Year 3 $275,000 $85,000 Because the projects have unequal lives, you have decided to use the replacement chain approach to evaluate them. You have determined that the appropriate cost of capital for both projects is 11%. Assuming that the Thai project's cost and annual cash inflows do not change when the project is repeated in three years and that the cost of capital remains at 11%, fill out the following table NPV French project: NPV Thai project