A and B are partners. C is admitted with 1/5 share. C brings ₹1,20,000 as his share towards capital. What is the total net worth of the firm?

₹6,00,000

The correct answer is option 3- ₹6,00,000.

To find the total net worth of the firm, we need to understand that C's 1/5 share corresponds to the capital he brought in. This means that the ₹1,20,000 represents 1/5 of the total net worth of the firm.

So, the total net worth = Capital brought in by C x Reciprocal of his share
                                     = 1,20,000 x 5/1
                                     = 6,00,000

So, the total net worth of the firm is ₹6,00,000.