please explain why the option is correct and remaining incorrect

Under IFRS 2, with respect to choice-of-settlement share-based payments, if it is the entity that has the right to choose between equity settlement and cash settlement, when must the entity choose the cash settlement?

Group of answer choices

If the entity has a present obligation to settle in cash

If the supplier provides goods

The entity always has the option to choose either method.

If the supplier provides services