Sources of Finance and Investment Appraisal Techniques for Zylla Limited Company

Zylla Limited Company provides ferry services and aims to expand their business. This report discusses short term and long term sources of finance that can help them achieve their goals. It also covers investment appraisal techniques to evaluate different investment techniques for the purchase of ferry.

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Table of Contents
INTRODUCTION................................................................................................................................3
MAIN BODY.......................................................................................................................................3
Different sources of finance.............................................................................................................3
Investment appraisal techniques......................................................................................................4
CONCLUSION....................................................................................................................................5
REFERENCES.....................................................................................................................................6

INTRODUCTION
Zylla limited company came to operate ferries operations that aim to offer transportation
services to peoples like river crossing services and other services. The company is located in Glen
Cove, NY, United States and its also part of other assistance services. The company is performing
well with the generation of sales of approximately $27976(USD). The organization also plan to
expand there businesses in the future to increase the profitability as well as company valuation. In
order to expand there business due to high demand for river crossing services, the company require
huge capital amount. Different short term and long term sources of finances can help the firm in
achieving there goals and objectives. In this report, different short term and long term finance
sources are well explained that helps the company in expanding there business. And appraisal
techniques to evaluate the different investment techniques for the purchase of ferry(Filipiak, 2022).
MAIN BODY
Different sources of finance
Every firms require business capital in order to start and run there business or expanding the
business. Due to the inflation all over the world, it is difficult to finance new ferry for the Zylla
because of high cost. For the purpose of expanding the business, Zylla will have to identify some
source of fund which may be for the short term or the long term.
Short term finance sources -
short term finance means the financial requires for the short period of time which may very
less than a year. It is also refereed to as working capital financing. Short term financing can help
Zylla in raising the working capital as well as covers all the current accounts payable. The most
important sources of finances are given as-
 bank loans-It is considered as the most importance source of finance in which bank provide
short term loans to the businesses on the basis of security of current assets like inventory.
The bank control the assets because of holding it as security. the interest is charged by the
banks on the loan amount for the specific interest rate and for specific time. Zylla can opt
short term loans from the bank for the purchase of ferry as well as help the expansion action.
The firm need to undergo best loan scheme which has suitable rate of interest with specific
period of time(Yoshino and Lakhia, 2022).
 Bank overdraft- it is considered as the external source of short term finance, specifically

for the small and medium enterprises. It undergoes an overdraft agreement that exist
between the firm and the bank. According to the overdraft agreement, Zylla can borrow
funds based on the loan limit. In order to borrow the funds, the company have to give
security to the bank which is generally known as collateral.
 Trade credit-it is known as the non banking short term finance source in which the credit is
increased by trader to another trader for the purchasing of goods and services on one date
and repaying for the goods and services on later date. It is known for the internal agreement
between the buyers and seller that does not include any legal instruments of debt. This
method can be expensive if the payment is not done on the specific period. Zylla can use this
source because of having easily accessibility. As it does not require any period of
negotiation or formal agreement. Zylla uses this source to reduce the borrowed capital.
Long term finance sources -
long term financial sources are those sources from where the organizations elevate fund in
order to expand there business for the long period of time such as more than 1 year. It is used in
those projects that requires huge capital investment by the organizations. The different source of
finances that Zylla can adopt in order to expand there business are Equity share capital, preferences
shares, debentures, long term loans from the financial institutions and many more. The most
specific long term source of finance is loans form financial institutions because financial institutions
provides long term loans to of more than 3 years to medium and large enterprises so that the
organization can expand there business(Kunatsa and Xia, 2022). Zylla can uses this method in order
to purchase new ferry and can expand there business activities in new markets.
Investment appraisal techniques
Capital investment evaluation directs on initiating the success of the investment plain not
only in the long term basis but also on short term. The elements that incorporate in the capital
appraisal includes property of firm, current project and new projects. The capital appraisal reckon
the budget of the essential capital as well as the evaluation of investments, which can be used to
decide on future business ventures in the new market, in addition to the expansion of current
activities. The capital investment appraisal techniques that can be used by Zylla limited company
are given below-
 Internal rate of return- it is known as the discounting rate at which the firm neither in a
loss nor makes a profit. To enhance the project efficiency, Zylla limited company can use
this investment appraisal technique. This technique helps the organization in accepting the

project or rejecting it by considering the cost of capital which may exceed the return rate.
 Net present value- it is considered as the most effective appraisal technique that helps in
measuring the cash inflow of the firm to identify the profit or loss gained from the plans of
investment. In order to check the ferry project expansion drives towards positive net present
value, the manger at Zylla can apply this evaluation technique. This technique helps in
finding the net cash flow at specific period of based on the predicted investment on ferry
projects(Leonardo and Pereira, 2022).
CONCLUSION
From the above text, it has been concluded that Zylla limited company provides ferry
services to the peoples that helps in facilitating in river crossing. The firm need to expand there
business in order to achieve there goals and objectives. To expand the business, the Zylla undergoes
different sources of finance such as short term sources as well as long term sources. The financial
manager of Zylla plays an important role in identifying the best source of finances for the
organization in order to purchase the new ferry and expand the firm into different business market.
It has also been concluded that, they evaluate the financial point of the company by various
investment appraisal method such as net present value and internal rate of return.

REFERENCES
Filipiak, B.Z., 2022. Trends and Prospects in Climate Finance. In Handbook of Research on Global
Aspects of Sustainable Finance in Times of Crises (pp. 92-113). IGI Global.
Kunatsa, T. and Xia, X., 2022. A review on anaerobic digestion with focus on the role of biomass
co-digestion, modelling and optimisation on biogas production and
enhancement. Bioresource Technology, 344, p.126311.
Leonardo, M. and Pereira, R., 2022. THE INVESTMENT DECISION-MAKING PROCESS OF
PORTUGUESE VENTURE CAPITAL FUNDS: WHAT'S DIFFERENT AND WHAT'S
THE SAME?. Academy of Entrepreneurship Journal, 28, pp.1-18.
Yoshino, N. and Lakhia, S., 2022. The Way to Finance Needed Infrastructure Investments in Asian
by Inviting Private Investors. Studies in International Economics and Finance: Essays in
Honour of Prof. Bandi Kamaiah, p.411.