Short and Long Term Sources of Finance and Investment Appraisal Techniques

Business Scenario
for
Individual Report
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Short term and long term sources of finance..........................................................................3
Investment appraisal techniques.............................................................................................4
CONCLUSION................................................................................................................................6
REFRENCES...................................................................................................................................7
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INTRODUCTION
Business expansion is consider as strategy related to growth of business in order to
enhance stores at which potential and targeted customers can purchase organisation's products as
well as services (Adebiyi and Banjo, 2017). In this situation requirement of finance is very high
and for that company need to identify their long as well as short investments. Organisation taken
for this report is Zylla Limited, that is operating numbers of ferries which offers river crossing
services for vehicles, people and goods across river. The main aim of developing this report is to
identify short and long term source of finance to funds as well as it will also include investment
appraisal techniques.
MAIN BODY
Short term and long term sources of finance
For a company source of finance are debt, equity, retained earning, term loan, working
capital, letter of credit, euro issues and many more. These types of source of finance will used at
different situations which are faced by a company (Burns, 2016). The source of finance is
divided into two types short term and long term. Explanation of short and long term finance
sources in respect of Zylla Limited are given below:-
Short term finance:
It refers to finance required for short period of time, generally for less than a year. At
organisation it is also called as working capital financing as well as it is normally required due to
uneven cash flow into business unit, seasonal pattern and many more. In respect of Zylla
Limited, some major short term finance are given below: Trade Credit- It is considered as essential technique for financial growth, in this business
operations can be conducted in credit form. According to this, suppliers let company to
buy products or services now and pay them later. In respect of this respective company
can take delivery of more ferries or other related materials or equipments without paying
cash on the spot.
 Bank Loan- It is consider as highly flexible option for the short term business funding. In
this bank will provide loan to company for the short time which can be less than a year as
well as company need to repaid loan amount in particular time duration (Gambetti and
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