Step 1: Find the speed of the iron block before collision.
\[
v=\sqrt{2gh}
=\sqrt{2\times10\times10}
=10\sqrt2\ \text{m s}^{-1}.
\]
Step 2: Use conservation of momentum.
Since the collision is perfectly inelastic,
\[
0.99(10\sqrt2)
=(0.99+0.01)V.
\]
Thus,
\[
V=9.9\sqrt2\ \text{m s}^{-1}.
\]
Step 3: Apply work--energy theorem.
Combined mass,
\[
m=1\,\text{kg}.
\]
Initial kinetic energy,
\[
K=\frac12(1)(9.9\sqrt2)^2
=98.01\ \text{J}.
\]
During penetration of \(s=0.09\,\text{m}\),
\[
(F-mg)s=K.
\]
Hence,
\[
F=\frac{98.01}{0.09}+10
=1089\ \text{N}.
\]
Therefore,
\[
\boxed{F=1089\ \text{N}}
\]
Thus,
\[
\boxed{(C)}
\]
is the correct answer.