One division of the Marvin Educational Enterprises has depreciable assets costing $4,000,000. The cash flows from these assets for the past three years have been: Year I Cash flows $ 1,200,000 2 $ 1,400,000 3 $ 1,620,000 The current (Le. replacement) costs of these assets were expected to increase 25% each year. Marvin used the straight-line depreciation method and the estimated useful life is 10-years with no salvage value. For return on investment (ROI) calculations, Marvin uses end-of-year balances. What is the residual income for each year, assuming the cost of capital is 15% and Marvin uses historical costs and net book values to compute residual income? Year 1 A. Year 2 $200,000 $ 435,000 Year 3 $690,000 B. $ 260,000 $520,000 $ 800,000 c. $ 260,000 $420,000 $540,000 D. $ 280,000 $400,000 $750,000 Multiple Choice Option A