Step 1: Picture the situation.
Water flows through a horizontal pipe whose mouth A is narrow ($4\,cm^2$) and outlet B is wider ($8\,cm^2$). A narrow region forces fluid to move fast, a wide region lets it slow down, and pressure trades off against speed. We are given $P_A=10^5\,Nm^{-2}$ and $v_A=20\,ms^{-1}$.
Step 2: Use continuity to get the speed at B.
The same volume of water per second passes every section, so $A_A v_A = A_B v_B$. Substituting, $4\times 20 = 8\times v_B$, which gives $v_B = \dfrac{80}{8} = 10\,ms^{-1}$.
Step 3: State Bernoulli's principle for a horizontal pipe.
Since both points are at the same height, the gravity terms cancel and we keep \[ P_A + \tfrac12 \rho v_A^2 = P_B + \tfrac12 \rho v_B^2 \] with $\rho = 1000\,kgm^{-3}$ for water.
Step 4: Compute the kinetic pressure terms.
At A, $\tfrac12 \rho v_A^2 = \tfrac12 (1000)(20)^2 = 2.0\times 10^5$. At B, $\tfrac12 \rho v_B^2 = \tfrac12 (1000)(10)^2 = 0.5\times 10^5$.
Step 5: Solve for the pressure at B.
Rearranging, $P_B = P_A + \tfrac12 \rho v_A^2 - \tfrac12 \rho v_B^2 = 10^5 + 2.0\times 10^5 - 0.5\times 10^5$, so $P_B = 2.5\times 10^5\,Nm^{-2}$.
Step 6: Sanity check.
The pipe widened, so the water slowed down, and slower water carries higher pressure. A rise from $10^5$ to $2.5\times 10^5$ is exactly that trend, so the answer is option (2).
\[ \boxed{P_B = 2.5\times 10^5\,Nm^{-2}} \]