15. The replacement chain approach - Evaluating projects with unequal lives Evaluating projects with unequal lives Free Spirit Industries is a U.S. firm that wants to expand its business internationally. It is considering potential projects in both Italy and Mexico, and the Mexican project after three years. These projects are mutually exclusive, so Free Spirit Industries's CFO plans to use the replacent approach to analyze both projects. The expected cash flows for both projects follow: If Free Spirit Industries's cost of capital is 13%, what is the NPV of the Italian project? $153,514$201,488$182,298$191,893 Assuming that the Mexican project's cost and annual cash inflows do not change when the project is repeated in three years and that the cost capital will remain at 13%, what is the NPV of the Mexican project, using the replacement chain approach? $54,240 $48,816 $59,664 $62,376