1- On a balance sheet, the "retained earnings" amount comes from where?

1. EBIDTA in the P&L statement

2. The net income line in the income statement (plus dividend payments and minus prior year Retained Earnings)

3. The net income line in the income statement (minus dividend payments and plus prior year Retained Earnings)

4. The ending cash line in the cash flow statement

2- Determine the amount of capital a company needs in the future using the following five year projected net cash flow analysis. (3 points)

Year 1 -$250

Year 2 -$100

Year 3 -$50

Year 4 $100

Year 5 $250

What are the pros and cons of raising this capital in a single round? (4 points)