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A
Store them in a pile in the corner
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B
Place them loosely in a metal, lidded container — oily rags can spontaneously combust through oxidation, and proper disposal prevents workshop fires
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C
Leave them on a workbench to dry
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D
Throw them in a regular trash bin immediately
Why this is the answer
SPONTANEOUS COMBUSTION is a real fire hazard with oily rags, especially those soaked in linseed oil, tung oil, or similar drying oils. The oxidation of these oils generates heat — in a bunched pile, that heat cannot dissipate and can reach the ignition point of the cloth. Safe disposal: spread rags flat outdoors to dry completely, OR place in a sealed metal container with water, OR use a metal safety can with a self-closing lid. Regular trash bins and indoor piles are fire hazards.
Source: ASVAB SI, Fire Hazard — Oily Rags