As the answer says, using EV is more appropriate if the decision is repeated, but it can be used as an approach even when the decision is a one-off – even though it is a big limitation.
As far as choice 2 is concerned, EV certainly does assume that investors are risk neutral.
It is the wording of the question that makes the difference – the question simply speaks of calculating and using EV’s, not whether it is a perfect way of making decisions or not.
If you watch my lectures on risk and uncertainty, then I do explain why there is still a logic in applying it to one-off decisions (if you are risk-neutral).