Hi GMATsid2016,
Notice how the answer choices to this question each involve two values and either an "and" or "or" qualifier. We can use those values against the prompt to determine what MUST be true.
To start, many of the answer choices include X=1, so let's see what happens when that 'condition' is met...
IF... X=1
XY + Z = X(Y+Z)
1(Y) + Z = 1(Y+Z)
Y + Z = Y + Z
X=1 certainly appears to be enough, on its own, to make the equation 'balance out' - so we wouldn't necessarily need any other restrictions on the values of Y or Z. There might be some other condition though that would also make the equation balance out, so we should take a good look at Answers D and E.
IF... Y=0
XY + Z = X(Y+Z)
X(0) + Z = X(0+Z)
X + Z = XZ
That isn't necessarily true (in fact, it's almost never true), so we can eliminate Answer D
IF... Z=0
XY + Z = X(Y+Z)
X(Y) + 0 = X(Y+0)
XY = XY
This is also balanced out, so this is another option.
Final Answer: E
GMAT assassins aren't born, they're made,
Rich