Okay, I've figured it out. In my defense, my copy of PT52 includes an experimental section, so this section is labeled as 4 instead of 3. The implication for you forum-users out there is clear: make sure to include as much of the first line of the argument as you can, as I've edited this post title to show.
ANYWAY, let's check out this argument. Caldwell concludes that the government's decision to demolish the naval base and its facilities was immoral because using the facilities for the good of the community would have benefited everyone. Well, the pretty major assumption is that if alternative A would benefit everyone, then alternatives B-Z are immoral.
(A) is correct, as you said, because it identifies Caldwell's assumption: he fails to consider that just because one choice would benefit everyone, that doesn't mean any other choice is immoral.
(B) we can rule out because Caldwell definitely takes the practical consequences of the government's actions into consideration. His beef is that the community could have used the facilities that got demolished -- certainly a practical concern.
(C) is out of scope entirely. Efficiency is not the issue, morality is.
(D) is the opposite of what Caldwell believes, since he tells us this particular action was efficient but not moral.
(E) is incorrect because nowhere does Caldwell suggest that these were the only two options.
Does that answer your question?
#officialexplanation