Response to the following questions:
1. What four statements are contained in most annual reports?
2. If a "typical" firm reports $20 million of retained earnings on its balance sheet, could its directors declare a $20 million cash dividend without any qualms whatsoever?
3. Explain the following statement: "While the balance sheet can be thought of as a snapshot of the firm's financial position at a point in time, the income statement reports on operations over a period of time."