Sources of Finance and Investment Appraisal Techniques for Zylla Limited

TASK 4

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Explain various short term sources and long term finance available to Zylla. In case of ferry
for the working capital requirements...........................................................................................3
Describe the various appraisal techniques which can be used for operation and acquisition of
ferry..............................................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Businesses can use various sources of finance such as share, borrowings, debentures, retained
earnings and working capital. Organisation uses these funds in the business operations in order to
increase the scope of area of the business. The business activities are categorised based on the
time period and ownership of the business. Investment appraisal techniques helps in ascertaining
the management whether to invest in a particular project or not (Dean and Hickman, 2018). The
following report includes short term and long term sources of finance for meeting the working
capital requirement of Zylla limited. By using investment appraisal technique decision is taken
by the investor according to the results of the projects.
MAIN BODY
Explain various short term sources and long term finance available to Zylla. In case of ferry for
the working capital requirements.
There are various sources of finance which can be used by the company in order to finance
its business activities. The proposal of ferry to be purchased by the company and its daily
working capital requirement needs to be funded by the organisation by using various sources of
finance. Some of the sources of finance are explained below,
Long term source of finance,
 Share issue: A company can raise its funds by issuing equity share in the general public
and raise funds in order to arrange funds for the operation.
 Debentures: it is also a source of finance which is used by the organisation to arrange
funds by paying a fix amount at regular intervals and paying the remaining sum at the
maturity of the debentures (Gabrielli and Ruggeri, 2019).
Short term sources of finance for working capital:
 Trade Credit: Working capital requirement is arranged by Zylla by their supplier of
goods. The amount saved by taking the goods on credit will help the organisation in using
the amount left with in other expansion activities.
 Bank Loan: Banks lends money to the organisation in lieu of which they charge interest
for the amount given by the bank.