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Shalini, after acquiring a degree in Hotel Management and Business Administration, took over her family food processing company of manufacturing pickles, jams and squashes. The business had been established by her great grandmother and was doing reasonably well. However, the fixed operating costs of the business were high and the cash flow position was weak. She wanted to undertake modernization of the existing business to introduce the latest manufacturing process and diversify into the market of chocolates and candies. She was very enthusiastic and approached a finance consultant, who told her that approximately ` 50 lakh would be required for undertaking the modernization and expansion programme. He also informed her that the stock market was going through a bullish phase. (a) Keeping the above considerations in mind, name the source of finance Shalini should not chose for financing the modernization and expansion of her food processing business. Give one reason in support of your answer. (b) Explain any two other factors, apart from those stated in the above situation, which Shalini should keep in mind while taking this decision.                                                                             [CBSE Sample Paper 2016]

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