1. Read the following extracts (E to H) before answering

Pre-theatre dining has been unpopular at Derby Theatre. Catering Consultant Andrew Dean has argued that a refurbishment of its cafe and kitchens is required. In order to finance the £100 000 catering investment, Derby Theatre management is considering using either some of its £120 000 retained profit or a loan

Evaluate these two methods of finance and recommend which one might be most appropriate to finance the £100 000 catering investment at Derby Theatre