Given the following three investments Investment number Fixed Investment Salvage Value Life time 150,000 10,000 5 2 90,000 10,000 4 3 120,000 20,000 4 The rate of retum is 10% for all alternatives. Determine which investment is recommended using rate of return on initial investment method First alternative Second alternative Third alternative Year Annual cash flow 1 40,000 35,000 50,000 2 45,000 40,000 40,000 3 50,000 45,000 40,000 4 60,000 50,000 60,000 5 50,000 50,000