Explanation:

Let 'M' be the maximum marks in the examination.

Therefore, Madhu got 32% of M = 32M/100 = 0.32M
And Kumar got 42% of M = 42M/100 = 0.42M.
In terms of the maximum marks Kumar got 0.42M - 0.32M = 0.1M more than Madhu. ---- (1)

The problem however, states that Kumar got 16 marks more than the cut-off mark and Madhu got 8 marks less than the cut-off mark. Therefore, Kumar has got 16 + 8 = 24 marks more than Madhu. ---- (2)

Now, Equating (1) and (2), we get
0.1M = 24 => M = 24/0.1 = 240
'M' is the maximum mark and is equal to 240 marks.
We know that Madhu got 32% of the maximum marks.
Therefore, Madhu got 32 x 240/100 = 76.8 marks.
We also know that Madhu got 8 marks less than the cut-off marks.

Therefore, the cut-off marks will be 8 marks more than what Madhu got
= 76.8 + 8 = 84.8.

Hence, option 3 is the correct answer.