One division of the Marvin Educational Enterprises has depreciable assets costing $4,170,000. The cash flows from these assets for the past three years have been: Year 1 2 3 Cash flows $1,455,000 $1,468,000 $1,637,000 The current (i.e., replacement) costs of these assets were expected to increase 15% 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 12% and Marvin uses historical costs and net book values to compute residual income? Year 1 Year 2 Year 3 A. $174,600 $176,160 $196,440 B. $587,640 $ 650,680 $869,720 c. $218,250 $ 220,200 $245,550 D. $587,640 $637,680 $687,720 Multiple Choice Option A Option B Option C