(A) Correct. 

(B) Incorrect. The use of the future tense “will turn” makes the sentence into a prediction rather than observation or a general rule as stated in the original sentence. For example, the below two sentences communicate different meanings:

1. If a small company faces financial troubles, it asks the government for help.
2. If a small company faces financial troubles, it will ask the government for help.

The first sentence presents a general rule or observation. On the other hand, the second sentence provides a prediction. Given the context, the original sentence presented as a general rule makes much more sense than this option presented as a prediction.

The second issue with this option is a very subtle one. The placement of “in the past” in this option leads to a significantly inferior meaning than the meaning presented in the original option (Please note that we are saying that this option is wrong because it presents an ‘inferior’ meaning, not because it presents a meaning different from the meaning presented in the original option. We do not believe that an option can be wrong just because it presents a meaning different from the one presented in the original sentence). To understand the issue here, let’s consider the below sentences.

1. In the past, Joe might have responded to your provocation in a violent way.
2. Joe might have in the past responded to your provocation in a violent way.
3. Joe might have responded to your provocation in a violent way.

We believe that statements 2 and 3 above mean the same while statement 1 has a different meaning. Statement 1 indicates that Joe currently doesn’t respond in a violent way. Statements 2 and 3 just talk about a possibility in the past and do not give any indication of the present situation. Do you see the difference?

If you don’t, don’t worry! It took us also a lot of time to see this difference. If you see the difference, you can appreciate that the phrase “in the past” is redundant in statement 2. 

Coming out of the analogy to our given option,  we can see that given the context of the sentence, we should communicate a meaning parallel to the meaning communicated in statement 1 above. Option B is parallel to statement 2 above and hence suffers from redundancy and has an inferior meaning.

(C) Incorrect. For the following reasons:

1. There is no antecedent for “it”. If “it” refers to the company, the sentence wouldn’t make sense.
2. The construction “liable to” is used in two ways:
   1. To mean “legally required to”
   2. To mean “likely to” in case of adverse consequence. For example, if you don’t care, you are liable to fall.

Neither of these two ways makes any sense in the given context.

(D) Incorrect. For the following reasons:

1. The second error of option C
2. The use of “the business” is not appropriate since no business has been mentioned before the use of this phrase; “a small company” is mentioned only later in the sentence.

(E) Incorrect. The use of “its” is incorrect because its antecedent needed to appear before the pronoun. The reason the antecedent of “its” needs to appear before the pronoun is that this pronoun is within a non-essential modifier. 

We believe that the reason many people don’t mark option A is that they become unsettled on seeing the repetition of “conflicts”. However, such repetition while framing Noun+Noun modifiers is pretty common. We’ll suggest that students brush up their knowledge of Noun+Noun modifiers (also known by a more technical name, Absolute Phrases).