One Division of the Marvin Educational Enterprises Has Depreciable Assets

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:
$$\begin{array} { | c | r | } \hline \text { Year } & \text { Cash flows } \\\hline 1 & \$ 1,200,000 \\\hline 2 & \$ 1,400,000 \\\hline 3 & \$ 1,620,000 \\\hline\end{array}$$
The current (i.e. ,replacement) costs of these assets were expected to increase 25% each year.Marvin used the straight-line depreciation method;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 ROI using historical cost and gross book value?
$$\begin{array} { | l | c | c | c | } \hline & \text { Year 1 } & \text { Year 2 } & \text { Year 3 } \\\hline \text { A. } & 20.0 \% & 25.0 \% & 30.5 \% \\\hline \text { B. } & 25.0 \% & 28.0 \% & 32.0 \% \\\hline \text { C. } & 18.0 \% & 26.5 \% & 28.0 \% \\\hline \text { D. } & 30.0 \% & 35.0 \% & 40.5 \% \\\hline\end{array}$$

A) Option A
B) Option B
C) Option C
D) Option D