Step 1: Understanding the Concept:
We need to evaluate the statements about Otto and diesel cycle efficiencies.
Step 2: Key Formula or Approach:
Efficiency of Otto cycle: \(\eta = 1 - 1/r^{\gamma-1}\).
Efficiency of diesel cycle: \(\eta = 1 - \frac{1}{r^{\gamma-1}} \frac{r_c^\gamma - 1}{\gamma (r_c - 1)}\).
Step 3: Detailed Explanation:
For Otto cycle, efficiency increases as the compression ratio increases.
So, Statement I is false.
For diesel cycle, as the fuel-cutoff ratio approaches 1 (cutoff approaches zero), the efficiency approaches that of the Otto cycle.
This is a known fact.
So, Statement II is true.
Step 4: Final Answer:
Statement I is false, but Statement II is true.
Hence, the correct option is (D).