One division of the Marvin Educational Enterprises has depreciable assets costing $4,190,000. The cash flows from these assets for the past three years have been:

YearCashflows1$1,485,0002$1,476,0003$1,639,000

The current (i.e., replacement) costs of these assets were expected to increase 20% each year. Marvin used the straight-line depreciation method and the estimated useful life is 10-years withnosalvage 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 14% and Marvin uses historical costs and net book values to compute residual income?

Year1Year2Year3A.$207,900$206,640$229,460B.$538,060$587,720$809,380C.$297,000$295,200$327,800D.$538,060$596,720$655,380

10 One division of the Marvin Educational Enterprises has depreciable assets costing $4,190,000. The cash flows from these assets for the past three years have been: Year Cash flows 3 1 $1, 485, 000 points $1, 476, 000 $1, 639,000 01:10:59 The current (Le., replacement) costs of these assets were expected to increase 20% 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 14% and Marvin uses historical costs and net book values to compute residual income? Year 1 Year 2 Year 3 A. $207, 900 $206, 640 $229, 460 B. $538, 060 $587, 720 $809, 380 C. $297, 000 $295, 200 $327, 800 D. $538, 060 $596, 720 $655, 380 Multiple Choice O Option A Option B O Option C O Option D