This scenario requires a pricing structure that changes over a multi-year contract, which is the primary use case for Ramp Deals in Salesforce CPQ. The requirement for a 100% discount for the first month is best modeled using the "Free Trial" segment type. The subsequent requirement for annual price increases over the 36-month term is directly addressed by the "Yearly" segment type. Combining these two segment types on the product record allows sales users to accurately configure the quote, showing the initial free period followed by the escalating yearly prices, thus meeting all the company's requirements.

A. The "Monthly" segment type is incorrect because the requirement explicitly states that costs increase yearly, not on a monthly basis.

C. While "Custom" segments could be configured for 12-month periods, the "Yearly" segment type is the standard, purpose-built feature for this exact scenario and represents the best practice.

1. Salesforce Help & Training Documentation, "Ramp Deals": This document outlines the use of Ramp Deals for products with prices that change over time. It describes how different segments (e.g., yearly) can be used to structure a deal. (Salesforce CPQ Administrator Guide, Section: Ramp Deals).

2. Salesforce Help & Training Documentation, "Product Ramp Segments": This documentation details the setup of ramp segments on a product record. It specifies the different Segment Type picklist values, including "Free Trial," "Yearly," "Monthly," and "Custom," and explains their intended use. The "Free Trial" type is for introductory periods, and "Yearly" is for annual pricing structures. (Salesforce CPQ Administrator Guide, Section: Product Ramp Segments).