However, considering the expectation of government grants that will offset the company's tax liability; the venture assumes a would-be profit generator. The company cannot bank on this tax relief as a basis to carry on with the proposed relocation to Turkey. The reason for that being that the amount accruable from the tax relief is on a portion of the entire expenditure of the company. The long run effect of this is still profitable to the company. Based on the outlay of the company and the capital requirement of the new product, combined with the possible market performance of the proposed new product, it is not advisable for the company to pursue executing these projects as it will further push the company to more vulnerable financial condition.

iv. Sources of finances

There are actually different reasons to consider sources of finances. Certain parameters serve as guidelines: (i) the amount required comes first, followed by (ii) the timeframe the finance is needed. Subsequently, (iii) the security in the disposal of the company and (iv) the preparedness of the business owners to relinquish some level of ownership in return for investment. This could be in order to kick start a business or to finance company's projects. Universally, finances are made available by finance institutions. This comes in the form of borrowing from the bank which is paid back with interests. This source of financing is available to any company that has the required collateral and/or good credit rating. Considering this source of finance for Warner plc may not be feasible. It has been continuously hard for the company to get loans from these finance institution. This is due to the company's lack luster financial stand and credit rating. Bank overdraft would have also been considered but the financing needed by the company is for longer period of time. This is still an area can be explored in addition to other areas. Nonetheless, there are still other sources of financing available. It should not be forgotten that the shares of the company is £3.

Business angels: Just as the name implies, these are 'angels'. They are very wealthy individuals that are ready to dish out cash in exchange for some of the company's equity. These angels take a lot of risk with the hope to owning a part of the company's equity. If the company eventually fails, they lose all their money and investments. Approaching the business tycoons comes to play when companies need huge amount of money to finance heavy projects. Approaching these angels is dependent upon some conditions:

The company must relinquish some of the company's equities

Good communication is required with these business angels. They will also request that they have a hand in the running of the company. This is necessary so as to safeguard their investments

The company must have a good track record of business operation. These angels will not give their monies to those who are not sure of what they are doing. Warner plc must set the record straight if considering this these business angels as an option.

The company must have good and experienced management team

Debentures: These are also another long-term source of financing open to business outfits. Debentures is like a bond or long-term loan issued to the public by the company. It has the uniqueness of fixed interest rates through out the period of this long-term loan. Members of the public whom the debentures are issued to invested in the company. They receive interest irrespective of whether the company makes profit or not. They are however not a co-owner of the company. The amount invested in the company is repaid to them over a period of years. There are no security or collateral requirements in order to access debentures.

Venture capital: This is also another source of long-term financing. It is money invested into a business venture with the aim of making profits from such. This kind of money is risk-laden. The reason...

The lender of such money will, over the period of the loan receives interest and subsequent repayment of the loaned capital. This is irrespective of the success or failure of the business. When such loan is granted, it is done in exchange for some of the company's equity. In order to access this kind of financing, the lenders look at certain parameters which are summarized below:
There must be high potential of making profits and that the returns can meet the criteria of the investment.

The lender would like to know if the profit accruable is really worth risking their huge sums of money.

They may also want to know if the products of the company are marketable.

They will also want to know if the company has the required management team that can propel the company to profit heights. They know that good business managers prolongs the lifespan of a business and profits are made (Manning 1993)

Although other requirements may be added but the once mentioned are the cogent ones. If these requirements are met, the loan can be secured.

Issuance of new shares: Financing can also be sources by the issuance of new shares. There are different approaches to this. The profit earned so far can be retained instead of being paid to shareholder (Black, 1976). The more dividends are paid, the lesser funds are available to the company (Easterbrook, 1984; Jensen, 1986). By so doing, funds are made available for the company. New shares can also be sold to shareholders which is know as right issues. Another approach is to offer shares to the public. Mush cash can be gotten from this. Owing to the £ 3 per share the company's shares are sold, it can attract the public to buy them with the hope of reselling to make profit (Modigliani-Miller (1958).

Although there are other sources of financing available to Warner plc but the listed ones are better suited to meet the condition of Warner plc. If however the company intends embarking on financing the two projects, the financial position does not allow that but considering the avenues listed, this can be possible. Owing to the current credit rating of the company, it is advisable to first consider debentures. With debentures, there is no bottleneck of security and collateral. Enough financing can be sourced from this channel to carry on with the two projects. A second or additional approach is to issue new shares. The current £3 per share is enough to attract buyers to the company's shares