If you don't know it by heart, take a look at the beginning of the section for the Reference Information table, which tells you that a triangle like this with legs s will have a hypotenuse of s√2.
Here's the tricky bit: the hypotenuse of triangle ACD is just plain old 4. There's no radical to be found. All that means though, is that the legs already had a √2 in them.
Think of it this way: what do we have to do to s√2 to make it be just s? We divide by √2! So we do the same thing with our hypotenuse of 4: we divide it by √2. So here's what we can get from that:
which can be rewritten as:
The area of the square is going to be (2√2)2. That's 22(√2)2, or (4)(2) = 8. Answer choice (A).