Step 1: Use the equation of continuity.
The rate of flow of water is
\[
Q=Av,
\]
where
\[
Q=2\times10^{-3}\ \text{m}^3\text{s}^{-1}
\]
and the area of the hole is
\[
A=5\ \text{cm}^2.
\]
Converting into SI units,
\[
A=5\times10^{-4}\ \text{m}^2.
\]
Therefore,
\[
v=\frac{Q}{A}.
\]
\[
v=\frac{2\times10^{-3}}{5\times10^{-4}}.
\]
\[
v=4\ \text{m s}^{-1}.
\]
Step 2: Apply Torricelli's theorem.
For a tank of large cross-sectional area,
\[
v=\sqrt{2gH}.
\]
Substituting
\[
v=4\ \text{m s}^{-1}
\]
and
\[
g=10\ \text{m s}^{-2},
\]
we get
\[
4=\sqrt{20H}.
\]
Squaring both sides,
\[
16=20H.
\]
\[
H=\frac{16}{20}.
\]
\[
H=0.8\ \text{m}.
\]
Step 3: Convert into centimetres.
\[
H=0.8\times100.
\]
\[
H=80\ \text{cm}.
\]
Step 4: Final conclusion.
Therefore,
\[
\boxed{H=80\ \text{cm}}
\]
Hence, the correct option is
\[
\boxed{(1)}
\]