Step 1: Compute \( A^4 \).
Since \( A = \begin{pmatrix} 2 & 0 & 0 \\0 & -2 & 0 \\ 0 & 0 & -1 \end{pmatrix} \), we compute \( A^4 \) by raising each diagonal element to the power of 4:
\[
A^4 = \begin{pmatrix} 2^4 & 0 & 0 \\ 0 & (-2)^4 & 0 \\ 0 & 0 & (-1)^4 \end{pmatrix} = \begin{pmatrix} 16 & 0 & 0 \\ 0 & 16 & 0 \\ 0 & 0 & 1 \end{pmatrix}
\]
Step 2: Compute \( A^{-1} \).
The inverse of \( A \) is obtained by taking the reciprocal of each diagonal element:
\[
A^{-1} = \begin{pmatrix} \frac{1}{2} & 0 & 0 \\ 0 & -\frac{1}{2} & 0 \\ 0 & 0 & -1 \end{pmatrix}
\]
Step 3: Multiply \( A^4 \) and \( A^{-1} \).
Now, multiply \( A^4 \) and \( A^{-1} \):
\[
A^4 A^{-1} = \begin{pmatrix} 16 & 0 & 0 \\ 0 & 16 & 0 \\ 0 & 0 & 1 \end{pmatrix} \begin{pmatrix} \frac{1}{2} & 0 & 0 \\ 0 & -\frac{1}{2} & 0 \\ 0 & 0 & -1 \end{pmatrix} = \begin{pmatrix} 8 & 0 & 0 \\ 0 & -8 & 0 \\ 0 & 0 & -1 \end{pmatrix}
\]
Step 4: Conclusion.
Thus, the result is \( A^4 A^{-1} = \begin{pmatrix} 8 & 0 & 0 \\ 0 & -8 & 0 \\ 0 & 0 & -1 \end{pmatrix} \), corresponding to option (A).