A mid-sized financial group in British Colombia is studying three investment options. The table below summarizes estimated cash flows for each of the three options over the next 5 years. The financial group is planning to choose only one investment options out of the three options. The MARR ( Minimum Aceptable Rtae of Return) for the financial group is 12%.

Investment options	Initial Payment	Payments per year	Return at End of year 5
1	$500,000	$150,000	$2,000,000
2	$700,000	$200,000	$2,900,000
3	$900,000	$300,000	$3,800,000

a) Use a rate of return method to find the economically best option for the financial group.

b) If the comparison is based on Annual Worth, do you expect different results? (Hint: no calculations are needed).

c) Is it always necessary for the investment option with the highest rate of return to be the best option?

d) What are the case(s) in which which a rate of return method is recommended?