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C and D are incorrect because they have a singular verb form; the subject, 'cows', is plural.
Both A and B are grammatically possible, but B is most unlikely. It would suggest that cows in general, i.e. all cows, are at the moment the sentence is uttered, or for a period of limited duration only, munching the green stuff.
A, correctly, suggests that it is a normal characteristic of cows that they eat grass.
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