Free Spirit Industries Inc. is a U.S.firm that wants to expand its business internationally. It is considering potential projects in both Italy and Mexico, and the Italian 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. Ino's CFO plans to use the replacement chain approach to analyze both projects. The expected cash flows for both projects follow: Project: Year : Year 1: Italian - $1,120,000 $370,000 $390,000 Year 2: Year 31 Year 4: $420,000 $330,000 $220,000 $95,000 Year 5 Year 63 Project Year ! Year 1 Year 2: Mexican -$475,000 $225,000 $235.000 Year 3: $255,000 If Free Spirit Industries Inc.'s cost of capital is 9%, what is the NPV of the Italian project? $320,704 $305,432 $274,889 O $259,617 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 9%, what is the NPV of the Mexican project, using the replacement chain approach? $223,514 $212,338 $257,041 $234,690