A company redeemed its preference share capital Rs. 2,00,000 for which purpose it raised equity capital of Rs. 1,50,000. It also issued bonus shares of the value of Rs. 1,00,000. These transactions will have the net effect on the flow of funds is follows—
1
no effect on the flow of funds
2
net increase in working capital Rs. 50,000
3
net decrease in working capital Rs. 50,000
4
None of the above