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Introduction to business studies | Investment appraisal techniques | Assignment

   

Added on  2021-01-02

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INTRODUCTION TOBUSINESS STUDIES TASK- 4
Introduction to business studies | Investment appraisal techniques | Assignment_1
Table of ContentsINTRODUCTION...........................................................................................................................1Main Body.......................................................................................................................................1Define short term and long term sources for acquisition of ferry...............................................1Investment appraisal techniques.................................................................................................3CONCLUSION................................................................................................................................4REFERENCES................................................................................................................................5
Introduction to business studies | Investment appraisal techniques | Assignment_2
INTRODUCTION Capital budgeting is the process of examine the bigger investment and large expensesmade by organisation. Zylla company render boat and Landscaping service to its customer. Thisreport describes different type of internal and external sources of finance, which can be use givenFirm for its long term and short lived objectives. Capital budgeting is required because there is huge financial and non financial riskattached with any big decision taken by Firm. But, this technique gives financial benchmark toaccept the offer. Study also cover various investment appraisal techniques, which help inrecognise the acceptable investment proposal among given alternatives.Main BodyDefine short term and long term sources for acquisition of ferryLong term finance sources are used in business to acquire fix assets and for long term(more than one year) loan. Interest rate of these sources are comparatively higher than short termbecause of higher flotation cost and maturity Risk premium (Alviniussen and Jankensgard,2015). Short term finance arrange fund to business, for its working capital requirement and forshort term loan (less than one year). To avail these loan, collateral securities are not required.Contrary long term fund demands security. Following are the type of different fund sources canbe use Zylla company for given purpose:Long term sources:Debenture/ BondsDebenture are security issue by organization to their creditor. Zylla company can availlong term fund without adding more participation of shareholder. Because if company issueequity share for the given purpose, it also has to give right to shareholder to give suggestion andlimit the company's decision making power.(Baker and Ricciardi, 2015.)Equity option are bestfor new entry business entity. Where if organization is already well established and have goodprofitability, they dividend is most suitable then equality. Firm has to pay (compulsory )promised interest to creditor on given date to creditorsRetain EarningZylla company can also use its own saving for acquisition of ferries. It renders greatflexibility, control and financial stability. It is comparability cheaper source of financing. Butorganisation have to take care the efficient and effective utilisation of resources. Over1
Introduction to business studies | Investment appraisal techniques | Assignment_3

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