Ishika after acquiring a degree in Hotel management and Business

Administration, Took over her family food accession 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 modernisation of the existing business to introduce the latest manufacturing processes and diversify in to the market of chocolates and candies. She was very enthusiastic and approached to a financial consultant who told her that approximately Rs$.50$ lakh would be required for undertaking the modernisation and expansion programme. He also informed hir that the stock market was going through a bullish phase.

i$)$ Keeping in mind. the above considerations, indentify the source of finance that should not be chosen by Ichila for financing the modernization and expression of her food processing business. Give

one reason in support of your answer.

ii$)$ Explain any two factors, a part from those stated in the above situation, which she should keep in mind while taking this decision.