Hi NandishSS,

This question is built around a subtle exponent rule "pattern", but if you don't recognize that pattern, then you can still get the correct answer (and prove that the pattern exists) by TESTing VALUES.

We're told that M and N are POSITIVE INTEGERS. We're asked if M is a factor of N. This is a YES/NO question.

1) N = 5(3^K), for any positive integer K

This Fact tells us NOTHING about M, so there's no way to know whether M is a factor of N or not.
Fact 1 is INSUFFICIENT

2) M = (3)^(K-1), for any positive integer K

This Fact tells us NOTHING about N, so there's no way to know whether M is a factor of N or not.
Fact 2 is INSUFFICIENT

Combined, let's TEST VALUES...

IF....
K = 1
N = 5(3) = 15
M = 3^0 = 1
The answer to the question is YES

IF....
K = 2
N = 5(9) = 45
M = 3^1 = 3
The answer to the question is YES

IF....
K = 3
N = 5(27) = 135
M = 3^2 = 9
The answer to the question is YES

Notice that both N and M consistently "triple" from TEST to TEST? This means that M will ALWAYS be a factor of N and the answer ALWAYS YES.
Combined, SUFFICIENT

Final Answer: C

GMAT assassins aren't born, they're made,
Rich