Hi Ritika,
I think the key point of confusion is the word "phase." In fact, "phase" and "process" are not interchangeable.
A phase is a reference to life cycle. For instance you may have a small project that is one phase or a large project that is multiple phases (e.g., Planning Phase, Design Phase, Production Phase, etc.).
A process refers to the Process Groups of Initiating, Planning, Executing, Monitoring and Controlling, and Closing. These five processes occur once for a one phase project or 'X' times for a project with 'X' phases.
Option D: Complete the final phase of the project cannot be correct because you would be disregarding the cancellation of the project that was described in the question.
a. Communicate the status of the project to the team and produce a final report is correct because these two actions are part of the Close Project or Phase process, the only process for Closing. This process is required for every project, regardless of whether the project objective has been completed.
Hope this helps