DRAG DROP
A company has Windows 8.1 client computers. All computers have the same hardware and
software installed. The Development and Sales departments have different backup
requirements. The requirements are described in the following table.
You need to select a backup location for each department. What should you do? (To
answer, drag the appropriate resource to the correct location or locations in the answer area.
Resources may be used once, more than once, or not at all.
You may need to drag the split bar between panes or scroll to view content.)
Answer: 
“If you’re saving your system images on an internal or external drive, or on CDs or DVDs, you can keep several versions of system images.”
http://windows.microsoft.com/en-au/windows/back-up-programs-system-settings-files#1TC=windows-7
External drive does not meet the requirement :”the backup file must not be in the same location as the OS”.
I would go for DVD RW resource for Development department.
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You’re wrong on this.
An external drive (USB, e-Sata, FW) is NOT the same drive/location as the OS.
The given answer is correct.
It can not be a network location as there can only be one backup image in a network location.
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