Step 1: Understanding the Concept:
This problem requires setting up a series of linear equations linking the ages of four individuals.
Detailed Explanation:
Let the ages of A, B, C, and D be represented by their respective letters.
From the problem statements:
1. $A = B - 3$
2. $B = C + 7$
3. The average of C and D is 25:
\[ \frac{C + D}{2} = 25 \implies C + D = 50 \]
We are given that D's age is 40:
\[ C + 40 = 50 \implies C = 10 \text{ years} \]
Substitute $C = 10$ into the equation for B's age:
\[ B = 10 + 7 = 17 \text{ years} \]
Substitute $B = 17$ into the equation for A's age:
\[ A = 17 - 3 = 14 \text{ years} \]
Therefore, the age of A is 14 years.
Step 2: Final Answer:
The age of A is 14 years, matching Option (B).