The largest square inside a circle has its diagonal equal to the circle's diameter. For radius 10 cm, diameter = 20 cm. If diagonal = 20, then side = diagonal/√2 = 20/√2 = 10√2. Area = side² = (10√2)² = 200 sq cm. The claimed answer B is correct. Option C (100) would be if side = 10, but the diagonal constraint makes the square larger.