What should I do about the Crazy Lady at work?

I need help. I've started this new job and there is a crazy girl there who I work with. She's a grown woman and she's always making up stories about things that I know aren't true. I befriended her on the first day just to be nice and now I'm realizing that I've made the biggest mistake of my life. He breath also... show more I need help. I've started this new job and there is a crazy girl there who I work with. She's a grown woman and she's always making up stories about things that I know aren't true.
I befriended her on the first day just to be nice and now I'm realizing that I've made the biggest mistake of my life. He breath also stinks REALLY bad sometimes that the air becomes unbarable. I don't want her hanging out with us anymore but I'm not sure what to do.
I can tell that she really needs friends, but I don't want to be associated with her anymore. What should I do?
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