13. The replacement chain approach - Evaluating projects with unequal lives Evaluating projects with unequal lives RTE Telecom Inc. is a U.S. firm that wants to expand its business internationally. It is considering potential projects in both Italy and Thailand, and the Italian project is expected to take six years, whereas the Thai project is expected to take only three years. However, the firm plans to repeat the Thai project after three years. These projects are mutually exclusive, so RTE Telecom Inc.'s CFO plans to use the replacement chain approach to analyze both projects. The expected cash flows for both projects follow: Project: Year O: Year 1: Italian -$1,120,000 $370,000 Year 2: $390,000 $420,000 Year 3: Year 4: $330,000 Year 5: $220,000 Year 6: $95,000 Thai Project: Year O: Year 1: -$475,000 $225,000 Year 2: 5235,000 Year 3: S255,000 If RTE Telecom Inc.'s cost of capital is 9%, what is the NPV of the Italian project? O $305,432 O $290,160 O $274,889 O $259,617 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 will remain at 9%, what is the NPV of the Thai project, using the replacement chain approach? $223,514 O $234,690 O $245,865 O $212,338