"Recently" can absolutely modify "growing." In fact, that's the option that makes most sense here. However, this problem is a flawed imitation of a real problem (#53 in the 2016 OG Verbal Review, #48 in the previous edition). In that problem, the phrase "recent extended sales slump" was correct, differing greatly in meaning from "recently extended sales slump," which is grammatically okay but makes it sound like someone chose to extend the slump.

This problem doesn't mirror the logic of the original and doesn't really make sense in its current form. I'd recommend that everyone ignore it and focus on the official version.
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I thought the rule was that adverbs could modify adjectives, verbs, and other adverbs. Why can't recently modify growing?

Here is how I approach the question

Basically I look at growing as an adjective (gerund) just to test whether to use recent or recently I replace growing with the noun form (growth)

Would it make sense to say recently growth or recent growth?

I hope this clarifies your inquiries.

All the best

Ans: A

This is how I reasoned:

Cut 1: Conditional Tenses

The second half of the sentence mentions "the team would start a month......"
Since WOULD is used, we cannot combine this with a present tense as in options B,C and D. All these options use present tense (is, has)
Had the second half of the sentence said " the team WILL start a month...." , Is and Has could've been used

Cut 2: SVA

The team is singular, therefore, IT has to be used.

Hi,

Adverbs can modify adjectives so I don't understand why this is wrong?

B C D all are in the wrong tense. E uses a plural pronoun (their) for a singular noun (team)