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 grandmother and was doing reasonably well but the fixed operating cost was very high and the cash flow position was weak. She wants to modernize and diversify it. She approached a financial consultant, who told her that approximately 1 crore rupees would be required for modernization and expansion programme. He also informed her that the stock market was going through a bullish phase.

1) After considering the above discussion, Name the source of finance Shalini should not choose for financing the modernization and expansion of her food processing business. Give one reason in support of your answer.

2) Explain two other factors she should keep in mind while taking this decision.

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