[AnkurGel]

Hey everybody! This is the question I'm completely obscured about how to proceed. Cyclopropane ring must be cleave but I'm clueless how to proceed in this reaction step by step. Please guide me through.

[Doc Oc]

Is that the reaction that was actually given to you?  No acid catalyst or anything?

Under those conditions, you wouldn't break the cyclopropane, breaking a C-C bond takes a tremendous amount of energy (even a strained cyclopropane bond).

[AnkurGel]

Reaction is acid-catalyzed.

[AnkurGel]

Hi guys! Can anyone of you help me out with a reply?

[Doc Oc]

The cyclopropane bond does not break.  Under those conditions you will open the ester to the acid.

[SVXX]

J-bone, according to Wiki a cyclopropane ring is susceptible to all sorts of electrophilic addition, due to a partial double bond character. Evidently this means H⁺ must be present. It is also highly strained (bond angles tell the story). H-OH would add in a Markownikov manner, opening up the ring thus.
Indeed, breaking a C-C bond requires "tremendous amount of energy", but this is a cyclopropane ring we're talking about. The most strained simple cycloalkane ever.

[AnkurGel]

Right SVXX. C-C bond enthalpy is high and requires high deal of energy to break down. And as you said, cyclopropane is more susceptible to break because of high strain because of  bond angle(60 degree). .
@JBone: Can you post exactly how the reaction will proceed in your point of view assuming ring does beak.

[orgopete]

While I cannot be certain of the mechanism(s), I would entertain an acid catalyzed ester hydrolysis or acid catalyzed cleavage (similar to t-butyl ester). After hydrolysis, you can decarboxylate this malonic acid analog.