Long and Short Term Sources of Funds for Acquisition of Ferry

TASK 4

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Description of long and short term sources of funds that are required for the acquisition of
ferry and fulfil working capital needs of organisation.................................................................1
2. Evaluation of different techniques of investment appraisal and recommendation for the
viability of acquisition.................................................................................................................2
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Zylla Limited is one of the entities which are operating large number of ferried which are
providing river crossing services for goods, vehicles and individuals. The managers of the
enterprise have decided to buy a new ferry so that the business could be developed (Jung, 2016).
Present report is based upon the same and for this purpose different topics such as long as well as
short term sources of funds along with investment appraisal techniques are discussed in this
project.
MAIN BODY
1. Description of long and short term sources of funds that are required for the acquisition of
ferry and fulfil working capital needs of organisation
As the managers of Zylla are planning to buy new ferry therefore it is very important for
the management to make sure that they are having sufficient funds for the acquisition. For this
purpose different sources of funds could be used. Description of all of them is as follows:
Long term sources: All the sources which are available to the organisation for more than
one year and includes private as well as public funding are considered as the part of it. For the
successful execution of all the operations it is used by all the companies. In order to buy a new
ferry these could also be used by Zylla Limited. All the options which are available to the entity
are as follows:
 Issuing debenture in the market: It is an external and long term source of fund which
can help to collect finance to buy a new ferry. It allows the investors to provide funds to
an organisation and get an appropriate percentage of interest on the money which is
invested by them. It can also fulfil the requirements of working capital because it will be
beneficial for Zylla to carry out operations in systematic manner.
 Bank loan: It is also a long term source of finance in which an organisation can take loan
from a bank by providing a business asset as a collateral security. If it is selected by the
company then it is very important for the borrower to pay a fixed amount to the bank
along with the instalment as interest (Bank loan, 2019).
Short term sources: All the sources of finance which could be used to generate funds in
less than one year are known as short term sources. In order to carry out day to day operations it
is very important for an organisation to have them as it fulfils requirements of working capital.
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