Correct answer: B. (4)
Explanation: The direct answer is B: 4 decimal places. First cancel common prime factors: \(\frac{2^3\cdot5^2}{2^7\cdot5^5}=\frac{1}{2^4\cdot5^3}\), because three factors of 2 and two factors of 5 cancel. The denominator is \(2^4\cdot5^3=16\cdot125=2000\). Since a terminating decimal has a denominator made only of 2s and 5s, it terminates. To write the denominator as a power of 10, the larger exponent is 4, so multiply by one extra 5: \(\frac1{2000}=0.0005\), which has four places after the decimal point. Option A, 3, is too small; four places are needed. Option B, 4, is correct. Option C, 5, counts an unnecessary zero or misreads the numerator. Option D, 7, ignores cancellation. Exam cue: after reducing, use the larger exponent of 2 and 5.