Trans World Entertainment Corporation, which owns the Record Town and Saturday Matinee retail chains, announced
that since sales of up to one-fourth of its stores are poor, they will be closed. We need to understand Direct and Indirect speech to answer such questions. Example
Direct speech - "I am going to the store, she said.
Reported or Indirect speech - "She said that she was going to the store" or even better, "She said she was going to the store."
In indirect speech, we convey someone's thoughts without using their exact words. Here are a few rules to remember when changing the Direct to Indirect speech.
1. Verb Tense changes - The verb tense in reported speech usually shifts back in time. Present tense becomes past tense, past tense becomes past perfect, and future tense becomes conditional. In the above example, "am" changes to "was"
2. Pronoun changes - Pronouns may need to be changed to reflect the speaker's perspective in the reported speech. "I" changes to "she."
3. Word order - The word order often follows the standard subject-verb-object structure, unlike the inverted structure used in direct speech. "she said,"
4. Time and place reference, eg. In direct speech, "I will meet you tomorrow at 5 pm, he said. In an Indirect speech - He said he would meet me the next day at 5 p.m.
Additionally, questions and commands in Direct and Indirect speech
Question
Direct speech - "Are you coming to the party?" she asked.
Reported or Indirect speech - She asked if I was coming to the party.
Command
Direct speech - "Please close the door," he said.
Reported or Indirect speech - He told me to close the door.
Sorry, I know it's too much, but it's good to know the basics to tackle such questions in reported speech.
Moreover, as SaraiGMAT pointed out, There is some preference for "because" over other cause-effect words!
As a thumb rule, "Because of" is used to modify actions,
"Because of" is a prepositional phrase that functions as an adverbial. It explains an ACTION or the reason for an ACTION.
Eg. The flight was delayed because of heavy traffic. Here, "Because of" explains the action of "delay," and the reason was " heavy traffic.
Now elimination -
(A) that since sales of up to one-fourth of its stores are poor, they will be closed - the reference to "they" is ambiguous. They refer to "All stores" or "one-fourth of stores." Moreover, present and future use is incorrect, as we saw above in the reported speech.
(B) it is closing up to one-fourth of its stores, which accounted for its poor sales - "is" in reported speech is wrong. It has to be "was". Reference of "which" is ambiguous - "All stores" or "one-fourth of stores."
(C) it was closing up to one fourth of its stores because of poor sales - cakewalk once we know the proper structure of reported speech. The use of "Because of" is preferred to explain the action "was closing."
(D) to be closing, on account of poor sales, up to one-fourth of its stores - wrong. As Mikemcgarry pointed out - we announce that P is Q; we don't announce P to be Q.
(E) having poor sales, such that up to one-fourth of its stores will be closed - "having poor sales" then what? Wrong usage.