Answer: Option C
$$\eqalign{
& {\text{According to question,}} \cr
& \sqrt {40.96} {\text{ + }}\sqrt {0.4096} {\text{ + }}\sqrt {0.004096} {\text{ + }}\sqrt {0.00004096} \cr
& \Rightarrow \sqrt {\frac{{4096}}{{100}}} + \sqrt {\frac{{4096}}{{10000}}} + \sqrt {\frac{{4096}}{{1000000}}} + \sqrt {\frac{{4096}}{{100000000}}} \cr
& \Rightarrow \frac{{64}}{{10}} + \frac{{64}}{{100}} + \frac{{64}}{{1000}} + \frac{{64}}{{10000}} \cr
& \Rightarrow 6.4 + 0.64 + 0.064 + 0.0064 \cr
& \Rightarrow 7.11 \cr} $$