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 Germany and Mexico, and the German project is expected to take six years, whereas the Mexican project is expected to take only three years. However, the firm plans to repeat the Mexican project after three years. These projects are mutually exclusive, so Free Spirit Industries's CFO plans to use the replacement chain approach to analyze both projects. The expected cash flows for both projects follow: Project: German Year : -$975,000 Year 1: $350,000 Year 2: $370,000 Year 3: $390,000 Year 4: $320,000 Year 5: $115,000 Year 6: $80,000 Project: Year 0: Year 1: Year 2: Mexican -$490,000 $250,000 $265,000 $275,000 Year 3: If Free Spirit Industries's cost of capital is 13%, what is the NPV of the German project? $191,893 $182,298 $153,514 $201.488 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 of capital will remain at 13%, what is the NPV of the Mexican project, using the replacement chain approach? $251,668 $197,114 $219,016 $240,918