Concept:
For an ideal gas,
\[
Q=\Delta U+W
\]
and for a diatomic gas,
\[
C_V=\frac{5R}{2}.
\]
Along \(CA\), the process is isobaric at pressure \(P_0\).
Step 1: Determine the temperatures at \(A\) and \(C\).
Using
\[
PV=nRT
\]
At point \(A\),
\[
P=P_0,\qquad V=V_0
\]
\[
T_A=\frac{P_0V_0}{nR}
\]
At point \(C\),
\[
P=P_0,\qquad V=2V_0
\]
\[
T_C=\frac{2P_0V_0}{nR}
\]
Hence,
\[
\Delta T=T_A-T_C
=
-\frac{P_0V_0}{nR}
\]
Step 2: Calculate the change in internal energy.
\[\begin{aligned}
\Delta U
&=
nC_V\Delta T
\\
&=
n\left(\frac{5R}{2}\right)
\left(
-\frac{P_0V_0}{nR}
\right)
\\
&=
-\frac{5}{2}P_0V_0
\end{aligned}\]
Step 3: Calculate the work done.
During \(C\rightarrow A\),
\[
W=P_0(V_A-V_C)
\]
\[
=P_0(V_0-2V_0)
\]
\[
=-P_0V_0
\]
Step 4: Find the heat exchanged.
\[\begin{aligned}
Q
&=
\Delta U+W
\\
&=
-\frac{5}{2}P_0V_0-P_0V_0
\\
&=
-\frac{7}{2}P_0V_0
\end{aligned}\]
The negative sign indicates heat is rejected.
Therefore,
\[
\text{Heat rejected}
=
\left|Q\right|
=
\frac{7}{2}P_0V_0.
\]
\[\begin{aligned}
\boxed{\frac{7}{2}P_0V_0}
\end{aligned}\]
Hence, option \(\mathbf{(D)}\) is the physically correct answer.
Note: The marked option in the image appears to be (C), but applying the first law of thermodynamics gives
\[
\boxed{\frac{7}{2}P_0V_0}.
\]