Answer: Option C
THIS TYPE OF QUESTION BECOMES VERY EASY WHEN WE ASSUME THREE COLOUR ARE RED(R) BLUE(B) AND GREEN(G).
WE CAN CHOOSE ANY COLOUR.
NOW ACCORDING TO THE STATEMENT 1 I.E.., CODES CAN BE GENERATED BY WAVING SINGLE FLAG OF DIFFERENT COLOURS, THEN NUMBER OF WAYS ARE THREE I.E.., R.B.G FROM STATEMENT III THREE FLAGS IN DIFFERENT SEQUENCE OF COLOURS, THEN NUMBER OF WAYS ARE SIX I.E.., RBG, BGR, GBR, RGB, BRG, GRB.
HENCE TOTAL NUMBER OF WAYS BY CHANGING FLAG = 3+ 6 +6 = 15