Question: Lithium Inc. is considering two mutually exclusive projects, A and B. Project A costs $95,000 and is expected to generate $65,000in year one and $75,000

Lithium Inc. is considering two mutually exclusive projects, A and B. Project A costs $95,000 and is expected to generate $65,000in year one and $75,000 in year two. Project B costs 120,000 and is expected to generate $64,000 in year one, $67,000 in year two, $56,000 in year three and $45,000 in year four. Lithium Inc's rate of return for these projects is 10%. The profitability index for Project B is: A) 1.55 B) 1.39 C) 1.33 D) 1.48

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