Concept:
A multiplexer (MUX) acts as a combinational selector switch. An $8:1$ MUX contains $2^3 = 8$ input data lines ($I_0$ to $I_7$) and $3$ select lines ($S_2, S_1, S_0$).
According to general multiplexer expansion properties:
• A MUX with $n$ select lines can naturally implement any logic function containing up to $n$ variables by mapping those variables to the select lines and tying individual data inputs to Logic $0$ or Logic $1$.
• Impressively, by using the implementation variable approach, an $n$-select-line MUX can also implement any arbitrary function of $(n+1)$ variables. The extra variable is routed to the data input pins in regular, inverted, or constant formats ($0, 1, x, \bar{x}$).
Step 1: Mapping the 4 variables to the 8:1 MUX architecture.
Let the arbitrary 4-variable Boolean function be $f(A, B, C, D)$.
We choose three of these variables, say $A, B,$ and $C$, and tie them directly to the three select lines of our multiplexer:
\[
S_2 = A, \quad S_1 = B, \quad S_0 = C
\]
These three lines can form $2^3 = 8$ distinct binary combinations ($000$ through $111$), which match the 8 input lines ($I_0$ through $I_7$) of our multiplexer.
Step 2: Evaluating the inputs using the remaining variable.
The remaining fourth variable, $D$, along with constants, will be applied to the data input channels. For each distinct combination of the selection variables $A, B, C$, the output function will behave in one of four ways depending on the state of $D$:
• Independent of $D$ and always low: \( I_n = 0 \)
• Independent of $D$ and always high: \( I_n = 1 \)
• Equal to $D$: \( I_n = D \)
• Equal to the complement of $D$: \( I_n = \bar{D} \)
Step 3: Conclusion on hardware count.
Because every single one of the 8 sub-minterm combinations can be uniquely satisfied by applying either $0, 1, D,$ or $\bar{D}$ to the data pins, a single 8:1 multiplexer unit is entirely sufficient to build any arbitrary 4-variable function. No extra multiplexers or combining logic gates are needed.
Hence, the correct choice is option (1).