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Remember that a modifying phrase should be as close as possible to what it modifies.
Scan and group the answer choices:
"Denied capital for modernization" can only refer to "the rail passenger business," not to "the public" as in (B) or "an appealing alternative" as in (C) or "private automobile transportation" as in (E).
Eliminate answer choices until only one remains:
(B), (C), and (E) are eliminated for the reasons stated above.
That leaves (A) and (D). (D) uses the wordy "transportation by means of private automobiles," whereas (A) uses the more concise "private automobile transportation." Also, (D) makes an unnecessary change of verb tense from "has not presented" (hasn't done it in the past) to "has not been presenting" (hasn't been doing it in the present).
(A) is the correct answer.
TAKEAWAY: When the GMAT uses an overly excessive number of words to express a thought that should be duly expressed with considerably fewer words, that answer choice can usually be exorcised with great authority. (In other words, get rid of answers that use too many words to express a simple idea.)
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a. the rail passenger business has not presented the public with an appealing alternative to private automobile transportation -- Correct.

b. the public has not been presented with an appealing alternative to private automobile transportation by the rail passenger business -- Modifier placement. Eliminate.

c. an appealing alternative to private automobiles has not been presented to the public by the rail passenger business -- same as B.

d. the rail passenger business has not been presenting the public with an appealing alternative to transportation by means of private automobiles -- use of present perfect continious is not needed here.

e. private automobile transportation has not had an alternative presented by the rail transportation business that appeals to the public -- same as B.
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Denied capital for modernization, the rail passenger business has not presented the public with an appealing alternative to private automobile transportation

a. the rail passenger business has not presented the public with an appealing alternative to private automobile transportation Correct
b. the public has not been presented with an appealing alternative to private automobile transportation by the rail passenger business X
c. an appealing alternative to private automobiles has not been presented to the public by the rail passenger business X
d. the rail passenger business has not been presenting the public with an appealing alternative to transportation by means of private automobiles X
e. private automobile transportation has not had an alternative presented by the rail transportation business that appeals to the public X

3-2 split.
What follows the introductory -ed modifier MUST be the rail passenger business.
A or C? A.

C is problematic because of a tense issue 'has not been presenting' is nonsense. It also suffers from ambiguity. "by means of private automobiles" ...is this how the business 'has not been presenting...'? OR is the sentence talking specifically about 'an alternative to private automobile transportation' (the intended meaning).
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