Question: You are considering an investment in a new start-up company, Over Armour Inc., an Internet service provider. A review of the companys financial statements reveals

You are considering an investment in a new start-up company, Over Armour Inc., an Internet service provider. A review of the company’s financial statements reveals a negative retained earnings. In addition, it appears as though the company has been running a negative cash flow from operating activities since the company’s inception. How is the company staying in business under these circumstances? Could this be a good investment?

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