Note: Grayscale can only be applied to Embedded images.
This is a Grayscale image:
To change an image to Grayscale you need to use the Properties Explorer, if you cannot see the properties explorer on screen, go to the SETTINGS ribbon and tick Properties.
Select the embedded image that you want to make Grayscale.
In the Properties Explorer, change the Grayscale option to Yes, your image will now turn Grey. If you want to make it Colour again, change this option back to No.