TB MC Qu. 14-96 (Algo) One division of the Marvin Educational Enterprises... One division of the Marvin Educational Enterprises has depreciable assets costing $4.070,000. The cash flows from these assets for the past three years have been: Year 1 2 3 Cash flows $1,305,000 $1,428,000 $1,627,000 The current (ie, 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 (Ron calculations, Marvin uses end-of-year balonces, What is the residual income for each year, assuming the cost of capital is 14% and Marvin uses historical costs and gross book values to compute residual income? Year 1 Year 2 Year 3 A. $328,200 $451,200 $ 650,200 B. $162,800 $162,800 $162,800 c. $261,000 $285,600 $325,400 D. $261,000 $451,200 $227, 780 A. $328,200 $451,200 $650,200 B. $162,800 $162,800 $162,800 c. $261,000 $285,600 $325,400 D. $261,000 $451,200 $227,780 Multiple Choice Option A Option B Optionc Option D