I'm sorry for the delayed response, but let's take a look at the explanation.
We have a linear game, with seven slots, and K in slot 4. This can look like _ _ _ K _ _ _
This question tells us that O is east of M, which in this case means that M -> O.
Since rule three tells us that K is next to M, we know there are two possible setups: _ _ MK _ _ _ and _ _ _ KM _ _ In both of these O must come after our KM block.
Our final rule tells us that that P comes after both K and M, and before L, or in other words, MK/KM -> P -> L. Since this rule means there must be two other houses after the KM block, and our earlier rule means that O must also come after our KM block, we know that there are three houses after the block, and that our setup looks as follows:
_ _ MK _ _ _ With the three houses after the block being P, L, and O. We can then use the process of elimination to determine that R and N are in the first two slots. Since rule 1 tells us that R is not first, we know our setup looks like what we have below.
NRMK _ _ _, With the three houses after the block being P, L, and O.
Since we know that K must come after M, we know that A must be true.