$\mathrm{Sonam} \mathrm{is} \mathrm{making} \mathrm{a} \mathrm{new} \mathrm{dance} \mathrm{outfit}. \mathrm{She} \mathrm{needs} 2\frac{1}{2} \mathrm{yards} \mathrm{of} \mathrm{fabric} \mathrm{for} \mathrm{the} \mathrm{shawl}. \mathrm{She} \mathrm{needs} 1\frac{1}{4} \mathrm{yards} \mathrm{of} \mathrm{fabric} \mathrm{for} \mathrm{the} \mathrm{dress}. \mathrm{If} \mathrm{she} \mathrm{has} 3 \mathrm{yards} \mathrm{of} \mathrm{fabric}, \mathrm{how} \mathrm{much} \mathrm{more} \mathrm{does} \mathrm{she} \mathrm{need}? \mathrm{If} \mathrm{each} \mathrm{yard} \mathrm{of} \mathrm{fabric} \mathrm{costs} \mathrm{Rs} 7.98, \mathrm{how} \mathrm{much} \mathrm{money} \mathrm{does} \mathrm{Sonam} \mathrm{need}?$

Given:
Length of cloth$=3 yards$

Cloth needed for shawl$=2\frac{1}{2}yards$

Cloth needed for the dress$=1\frac{1}{4}yards$

Cost of one yard cloth$=Rs 8$

To calculate:
additional cloth required and its cost

Calculations:
$\begin{array}{rcl}\mathrm{total} \mathrm{cloth} \mathrm{requirement} & =& 2\frac{1}{2}+1\frac{1}{4}=\frac{5}{2}+\frac{5}{4}=\frac{10+5}{4}=\frac{15}{4}\mathrm{yards}\end{array}$

$\begin{array}{rcl} & \Rightarrow & \mathrm{Additional} \mathrm{cloth} \mathrm{required}=\frac{15}{4}-3=\frac{15-12}{4}=\frac{3}{4}\mathrm{yards}\end{array}$

$\Rightarrow \mathrm{Cost} \mathrm{of} \mathrm{purchasing} \frac{3}{4}\mathrm{yard} \mathrm{cloth}$$=\frac{3}{4}\times 7.98=\mathrm{Rs} 5.985$

Therefore, she needs $\frac{3}{4}\mathrm{yards}$ of additional cloth and it costs $Rs 5.985$

Hence, the correct answer is option A.