Problem:
Lithium Inc is considering tow mutually exclusive projects, A and B. Projects A costs $95,000 and is exprected to generate $65,000 in year one and $75,000 in year 2. Project B costs $120,000 and is expected to generate $64,000 in year one, $67,000 in year two and $56,000 in year three and $45,000 in year four. Lithium Inc. required rate of return for these projects is 10%.
Required:
The modified rate of return for Project A is:
A. 29.63%
B. 24.18%
C. 26. 89%
D. 19.19
Note: Please provide step by step solution.