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CMcAboy, "that" implies distance or selection. Consider this sentence:

"Many suspected that Mr. and Mrs. O'Leary's age kept them from the performance, but in fact, Mr. and Mrs. O’Leary couldn’t get away from their grandchildren and that is why they didn’t make it to the opening night."

Here, I am contrasting the expected reason with the actual reason, and so I use "that" to select the actual reason.

In the sentence as written, there is no need to select so "this" is probably preferable. However, note that this is a style preference, not a grammatical error, so "this" or "that" would both be acceptable. Therefore, I like (A).

With (C), we should look at other factors, most notably that a fact is not a reason - those words have very different meanings, and one should probably not be used to describe the other. This is a meaning problem, and trumps the style issue. Also, "the fact that" is generally unnecessary - not really wrong on its own, but often the GMAT will use it in wrong answers. Treat it with suspicion, along with "being."
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Just a quick heads up.. This question is part of the GmatClub Grammar Book and the OA for this question in the book stands as C.
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Mr. and Mrs. O’Leary couldn’t get away from their grandchildren, and this is why they didn’t make it to the opening night of the new theater performance.

A) Mr. and Mrs. O’Leary couldn’t get away from their grandchildren, and this is why they couldn’t
- This says that Mr and Mrs Oleary couldnt get away from their grandchildren.

C) The fact that Mr. and Mrs. O’Leary didn’t want to leave their grandchildren is the reason why they didn’t
- Here it says that they didnt want to leave their grandchildren .

both are having different meaning if it plays a imp role . I think if i look at meaning i will go to A because that sounds a more appropriate reason for not attending the theater.
While b,d,e are totally out of question.
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Option A has Pronoun Ambiguity ; "they" can refer to "Mr. and Mrs. O’Leary" and "grandchildren"
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Hello from the GMAT Club VerbalBot!

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