Step 1: Understanding the given function.
The function is defined as:
\[
f(x) = \left\{ \begin{array}{ll}
\frac{|x|}{x} & \text{if } x \neq 0
0 & \text{if } x = 0
\end{array} \right.
\]
For \( x \neq 0 \), \( \frac{|x|}{x} \) is the sign function, which equals \( 1 \) for \( x > 0 \) and \( -1 \) for \( x < 0 \).
Step 2: Investigating continuity at \( x = 0 \).
We check if the function is continuous at \( x = 0 \). For continuity, the limit of \( f(x) \) as \( x \) approaches 0 must equal the value of the function at \( x = 0 \).
Step 3: Calculating the left-hand limit.
As \( x \) approaches 0 from the left (\( x \to 0^- \)), \( \frac{|x|}{x} = -1 \).
Thus:
\[
\lim_{x \to 0^-} f(x) = -1
\]
Step 4: Calculating the right-hand limit.
As \( x \) approaches 0 from the right (\( x \to 0^+ \)), \( \frac{|x|}{x} = 1 \). Thus:
\[
\lim_{x \to 0^+} f(x) = 1
\]
Step 5: Conclusion.
Since the left-hand limit and the right-hand limit are not equal, the limit does not exist at \( x = 0 \). Therefore, the function is discontinuous at \( x = 0 \). The correct answer is option (A).