Step 1: Concept
The perpendicular distance $d$ from a point $(x_1, y_1)$ to a line $ax + by + c = 0$ is given by $d = \frac{|ax_1 + by_1 + c|}{\sqrt{a^2 + b^2}}$.
Step 2: Analysis
Given $d = 5$, point $(1, 2)$, and line $4x - 3y + k = 0$.
$5 = \frac{|4(1) - 3(2) + k|}{\sqrt{4^2 + (-3)^2}} = \frac{|4 - 6 + k|}{5}$.
Step 3: Calculation
$25 = |k - 2| \implies k - 2 = 25$ or $k - 2 = -25$.
$k = 27$ or $k = -23$.
Final Answer: (A)