Choice "B" is correct. Leasehold improvements are capitalized and then amortized over the lesser of the life of the improvements or the remaining term of the lease (in this question, the amortization period is the lesser of 15 or 20). The leasehold improvement costs should thus be expensed over a period of 15 years. This rule makes sense because the party making the leasehold improvements will benefit from the improvements for either the life of the improvements or the term of the lease if the term of the lease is shorter than the life of the improvements (in which case, somebody else will benefit from the improvements for the remaining life of the improvements).
Choice "d" is incorrect. Leasehold improvements are capitalized and amortized, not expensed as incurred.
Choice "a" is incorrect. Leasehold improvements are capitalized and then amortized over the lesser of the life of the improvements or the remaining term of the lease, which in this question is 15, not 20, years.
Choice "c" is incorrect. Leasehold improvements are capitalized and then amortized over the lesser of the life of the improvements or the remaining term of the lease, not expensed in the year in which the lease expires.