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The answer is D.

We know it is an isosceles triangle and area = 25 sq cm.
This means 1/2 * base * height = 25 sq cm ---- base^2 = 50 sq cm ----- base = 5*sqrt(2).

Statement 1 : The cut is made 2 inches from the hypotenuse.
Since this is parallel to the hypotenuse, the base and height are going to decrease in length by the same amount. No need to calculate. We can find the info using the property of similar triangles.
Sufficient.

Statement 2 : There was a 40 percent decrease in the length of the hypotenuse of the triangle.
Again, this is similar to the first statement and using the same strategy we can find the values.
Sufficient.
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