If all the flip-flops were reset to 0 at power on, what is the total number of distinct outputs (states) represented by $PQR$ generated by the counter?

Starting with the initial state $(P, Q, R) = (0, 0, 0)$ at power-on:

1. State $000$: Evaluating the next-state logic gives the next state as $100$ (or the sequence of states generated by the counter).

2. Continuing the state transitions until the states repeat:

   • State 1: $(0, 0, 0)$

   • State 2: $(1, 0, 0)$

   • State 3: $(0, 1, 0)$

   • State 4: $(0, 1, 1)$

After 4 states, the counter cycles back to the initial state $(0, 0, 0)$, producing a cycle of length 4.

Therefore, the total number of distinct states generated by the counter is 4, which corresponds to option (B).