The correct answer is C. 2 m/sec.
The Froude number is a dimensionless number that is used to compare the flow of fluids around two objects of different sizes. It is defined as:
$Fr = \frac{v}{\sqrt{gL}}$
where $v$ is the velocity of the object, $g$ is the acceleration due to gravity, and $L$ is a characteristic length of the object.
For dynamic similarity, the Froude numbers of the ship and the model must be equal. Therefore, the velocity of the model must be:
$v_m = \sqrt{\frac{g_m L_m}{g_L L_L}} v_L$
where $g_m$ and $g_L$ are the accelerations due to gravity at the model and ship locations, respectively, and $L_m$ and $L_L$ are the characteristic lengths of the model and ship, respectively.
In this case, $g_m = g_L$ and $L_m = \frac{1}{25} L_L$. Therefore, the velocity of the model is:
$v_m = \sqrt{\frac{g_L L_L}{25 g_L L_L}} v_L = \frac{1}{5} v_L = 2 \text{ m/sec}$