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Investment Appraisal Techniques Doc

Added on - 08 Dec 2020

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Task 4:Business Scenario forIndividual Report
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1MAIN BODY..................................................................................................................................1Sources of finance........................................................................................................................1Investment appraisal techniques..................................................................................................2CONCLUSION................................................................................................................................4REFERENCES................................................................................................................................5
INTRODUCTIONThe Zylla limited company is a company which operates in the field of ferries. Theseferries provide river crossing services for people, vehicles and goods going or coming across theriver. The business of the company is going good presently and the demand is also increasing. Sofor this the company is planning to expand its operations. The essay will outline the differentsources from where it can borrow money for catering the needs of long term and short termrequirements.MAIN BODYSources of financeSources of finance means some place from where the person can borrow the money forits personal use or for business purpose. The sources of finance are many but mainly there areonly two type of sources that is the short term and the long term sources of finance (Corsatea,Giaccaria and Arántegui, 2014). The money borrowed from any of the either source will have topay some costs in terms of the interests.Short term sources of finance-it refers to a source of finance from where the business borrowsadditional money which the business requires for meeting its short term requirements. Somesources of raising money from short term are as follows-Cash credit-it is an arrangement through which the bank allows its customers to borrowmoney up to a certain fixed limit. The money is given by the bank against some tangiblesecurity or guarantee for a short time period. The borrower can withdraw cash up to thelimit assigned by bank according to his needs. The interest charged by the bank is ondaily basis which is the major disadvantage for this source.Discounting of bills-in this type of method the bank lends money without any collateralsecurity or guarantee. The seller draws a bill of exchange against the buyer of goods oncredit. The bank purchases this bill and credits the customer's account with the amount ofthe bill less the discount. At the maturity the bank presents the bill in front of the acceptorfor the payment.Long term sources of finance-these are different types of sources from where the businessmencan borrow money for a much longer period. There are many types of long term sources offinance which are discussed as below-1
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