Step 1: Understanding the circuit.
The circuit consists of:
1. A combinational logic circuit with inputs \( X \), \( Y \), and \( Z \) generating \( S \) using the logic:
\[
S = X \oplus Y \oplus Z,
\]
where \( \oplus \) denotes the XOR operation.
2. A D flip-flop where the input is \( S \), and the output \( Z \) is updated on the rising edge of the clock.
Step 2: Current values of inputs.
From the problem, the initial conditions are:
\[
X = 1, \, Y = 0, \, Z = 1.
\]
Step 3: Calculate \( S \).
Using the formula for \( S \):
\[
S = X \oplus Y \oplus Z = 1 \oplus 0 \oplus 1.
\]
Using XOR logic:
1. \( 1 \oplus 0 = 1 \),
2. \( 1 \oplus 1 = 0 \).
Thus, \( S = 0 \).
Step 4: Determine the updated \( Z \).
The D flip-flop updates \( Z \) to the value of \( S \) after the clock edge. Therefore:
\[
Z = S = 0.
\]
Step 5: Re-evaluating \( S \) after clock update.
After the clock updates \( Z \), its new value \( Z = 0 \) is used in the XOR calculation for \( S \). Substituting the updated \( Z \):
\[
S = X \oplus Y \oplus Z = 1 \oplus 0 \oplus 0.
\]
Using XOR logic:
1. \( 1 \oplus 0 = 1 \),
2. \( 1 \oplus 0 = 1 \).
Thus, \( S = 1 \).
Step 6: Final values after clock application.
After the clock edge:
\[
S = 1, \, Z = 0.
\]
Conclusion: The final values are \( \mathbf{S = 1, Z = 0} \), which corresponds to option (C).