Step 1: Check each statement against the known background of the Penman equation and crop coefficient practice.
Step 2: Statement (I) is correct. Penman's 1948 equation for open water evaporation is a combination method, it blends the energy balance approach (net radiation driven evaporation) with the aerodynamic or mass transfer approach (sometimes called sink strength, related to wind and vapour pressure deficit) into a single formula.
Step 3: Statement (II) is correct. Potential evapo-transpiration is converted to actual crop evapo-transpiration using a crop coefficient, ET equals Kc times PET. Since water use differs by crop type, growth stage, soil and local climate, separate crop coefficients are worked out for different crops, different growth stages of the same crop, and different regions.
Step 4: Both statements are correct, so option 1 is the answer.