Company AAA is evaluating two investment projects. Project A has an initial investment of $400,000 and is expected to generate cash flows of $100,000 per year for 5 years. Project B has an initial investment of $450,000 and is expected to generate cash flows of $120,000 per year for 4 years. Calculate the profitability index (PI) for each project and recommend the one with the highest PI. Explain the profitability index (PI) as a capital budgeting technique used to assess investment projects' profitability relative to their initial investment cost. Discuss the advantages and limitations of the profitability index method in investment decision-making and its suitability for comparing projects of varying sizes and durations.

Company BBB has total revenue of $2,000,000 and total expenses of $1,500,000. Calculate its net income and discuss the significance of net income in evaluating a company's financial performance. Explain how net income is derived from subtracting total expenses from total revenue and its importance in assessing profitability, shareholder returns, and potential for growth and investment.