Explanation:

- The current ratio is a measure of a company’s ability to pay its short-term obligations with its short-term assets. It is calculated as current assets divided by current liabilities.

- With a current ratio of 3.5:2, it indicates that for every Rs2 of current liabilities, the company has Rs3.5 of current assets.

- The firm's current liabilities are Rs80,000.

- Current assets can be calculated as follows: (3.5/2) x Rs80,000 = Rs1,40,000.

- Working capital is defined as current assets minus current liabilities.

- Therefore, working capital = Rs1,40,000 - Rs80,000 = Rs60,000.

Your Answer: Rs60,000