Sources of Funds and Investment Appraisal Techniques for Zylla Limited

Business Scenario for
Individual Report

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
1. Short and long term sources of funds serving the needs of the Zylla Limited........................3
2. Evaluating various investment appraisal techniques and recommending viability of
acquiring and operating new ferry...............................................................................................4
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................1

INTRODUCTION
Zylla Limited is a company operating in business of ferries, providing services of river
crossing to people, vehicles and goods across a river. The business is looking forward to expand
its operations meeting the increase in the demand. For the expansion purpose the company is
assessing the investment plan regarding purchase of new ferry. The report will highlight the
different short and long term sources of finance. Various investment appraisal techniques are
evaluated in the report. Report recommends on the viability of the investment technique.
MAIN BODY
1. Short and long term sources of funds serving the needs of the Zylla Limited
Short Term Sources of Fund: Trade Credit: This is the easiest and important form of short term source of finance. The tool
is commonly used by the businesses in their growing stage. Trade credit is an arrangement
between the company with its suppliers in which they agree to give the company goods
without asking them to pay in cash or by cheque instantly (Wu, Zhang and Baron, 2019). This
helps the in reducing and managing its immediate working capital requirement. Factoring Services: The company can exchange the account receivables in holds with other
company to get immediate cash meeting its working capital requirements (Arkhangelskaya and
Salin, 2021).
Long Term Sources of Fund: Equity Shares: These are the source of long term finance for the company. Through this
source of raising finance company can sell the part of the ownership with the general public
in exchange of money (Dempsey, 2019). Issuing equity shares by the company gives voting
rights, right to share in profits and claim on the assets of the company. Bonds: This is a type of debt. Company to fulfil its requirements of funds for acquisition of
new ferry can issue bonds. The investors who are willing to invest in the business will
purchase the bonds by lending money to the company for a specified period of time
(Sartzetakis, 2021). In return company will have to pay agreed interest amount over the entire
life span of the bonds along with repayment of the principal amount.