Total ob QUESTION THREE On December 31, 2016 BGM Enterprises recorded an average annual rate of return of 18% while Troik Investments Bureau recorded an average annual rate of return of 26% on the portfolio. As Chief Financial Officer of the holding company for BGM Enterprises and Troik Investments Bureau you make the following projections for the next five (5) years. (a) BGM Enterprises average annual rate of return to grow at 5% per annum the following first two (2) years, decline by 8% in the third year due to poor commodity markets and grow at a constant rate of 6% thereafter. (b) Troik Investment Bureau portfolio's average annual rate of return was projected to grow by 4% in the first year, no growth in second and third years and grow at a constant rate of 5% thereafter. Required: ader A. Compute the projected Arithmetic Mean rate of return for each of the two companies. Comment on the results. (10 Marks) B. Compute the projected Geometric Mean rate of return for each of the two companies. Comment on the results. (10 Marks) C. Briefly discuss the characteristics of each method above and the recommended circumstance in which to use each of them