Step 1: Use the relation for sag of a simply supported beam.
For a beam supported at both ends and loaded at its centre,
\[
y\propto\frac{L^3}{bd^3},
\]
where
\[
L=\text{length},
\]
\[
b=\text{breadth},
\]
and
\[
d=\text{thickness}.
\]
Hence,
\[
\frac{y_2}{y_1}
=
\frac{L_2^3}{L_1^3}
\cdot
\frac{b_1}{b_2}
\cdot
\frac{d_1^3}{d_2^3}.
\]
Step 2: Substitute the given values.
Given,
\[
L_1=80\,\text{cm},
\qquad
L_2=120\,\text{cm},
\]
\[
b_1=2.5\,\text{cm},
\qquad
b_2=3\,\text{cm},
\]
\[
d_1=2\,\text{mm},
\qquad
d_2=3\,\text{mm},
\]
and
\[
y_1=1.2\,\text{mm}=0.12\,\text{cm}.
\]
Therefore,
\[
y_2
=
0.12
\left(\frac{120}{80}\right)^3
\left(\frac{2.5}{3}\right)
\left(\frac{2}{3}\right)^3.
\]
Step 3: Simplify.
Now,
\[
\left(\frac{120}{80}\right)^3
=
\left(\frac32\right)^3
=
\frac{27}{8},
\]
and
\[
\left(\frac23\right)^3
=
\frac{8}{27}.
\]
Hence,
\[
y_2
=
0.12
\times
\frac{27}{8}
\times
\frac56
\times
\frac{8}{27}
=
0.12\times\frac56
=
0.10\,\text{cm}.
\]
Thus,
\[
\boxed{y_2=0.10\,\text{cm}.}
\]
Therefore, the correct option is \(\boxed{(B)}\).