Zylla Ltd: Financial Sources and Investment Appraisal Report

This report analyzes Zylla Ltd's financial strategies for expanding its ferry service operations by purchasing new ferries. The report begins with an introduction outlining Zylla Ltd's business and expansion goals. The main body of the report is divided into two tasks. Task 1 explores both short-term and long-term financing options available to Zylla Ltd, including trade credits, bank loans, equity shares, and lease financing. Task 2 evaluates various investment appraisal techniques, such as payback period, accounting rate of return, and net present value, recommending their suitability for assessing the financial viability of the ferry purchase. The report concludes by summarizing the key findings and recommendations regarding financial sources and investment strategies for Zylla Ltd's expansion plans.

Individual Report

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK 1............................................................................................................................................3
Short term and long term sources for the purchasing of ferry and to fulfil the needs of
company......................................................................................................................................3
TASK 2............................................................................................................................................4
Evaluation of various investment appraisal techniques and recommend their viability.............4
CONCLUSION................................................................................................................................6
REFERENCES:...............................................................................................................................7
Books and Journals.....................................................................................................................7

INTRODUCTION
Zylla limited is a company which provide services for vehicles, peoples and goods for
river crossing by offering ferries services in different regions. They are planning for expanding
their operations and business by capturing large market area (Bieliński and Mosionek-Schweda,
2018). Organisation is deciding to buy more ferries so that they can provide services to expanded
regions including people and other organisations. They are making strategic decisions according
to their sources of funds which is highly required for growth and expansion. This report will
include about different sources including long term and short term finances for the acquisition of
resources. It will also include about evaluation of different investment appraisal techniques along
with the recommendations.
MAIN BODY
TASK 1
Short term and long term sources for the purchasing of ferry and to fulfil the needs of company.
Organisations require large investment in order to acquire new machineries and
equipments for their expansion. They require finance which assist in smooth and proper
operations required for effective services (Gasanov and et.al., 2022). Zylla requires finances so
that they can grow their existing business which can acquire large number of customers. They
operates in providing services which help individuals in crossing rives with the help of ferries.
They have to invest in purchasing of new ferries so that they can generate more revenues. It is
important to analyse the internal and external sources of finance so that organisation can
understand their sustainability. They can also identify their short term and long term sources of
finance which are discussed as follows:
Short term sources
This refers to the requirements of funds for not longer period of time for not more then
one year. These finances can be pay back by organisation within one year which limits their
liability. There are various short term sources which can be used by Zylla are as follows:
Trade credits: This suggest that suppliers of goods and products can extend the
creditability for the buyers. It also assist organisation in overcoming the challenges of
competition by providing their customers credit facility. Zylla can also opt for trade credits as it

helps them easily purchasing ferries in short period of time. It is more flexible method as it does
not involve lengthy documentation and paper work.
Bank loans: This is most common short term source for organisations which can easily
get amount from banks for limited period of time (Palmieri, Perrin and Whitehouse, 2018). Zylla
can apply for bank loans which can assist them in expanding their operation in effective manner.
Bank loans include suitable interest rate according to the scheme and amount. Businesses can
easily commence their operations by getting bank loans which they have to pay on particular
schedule.
Long term sources
The financial requirements of business can be easily satisfied by taking help of long term
financial assistance. Zylla have to invest in ferries which needs to take help of long term sources
of finances which are mentioned below:
Equity shares: It can be said as ownership capital which can be used by businesses in
expanding their operations. Share holders are legal owners and they posses unrestricted claim on
assets and machineries of company. Zylla can invest purchase share of the company which they
can use for further investment by purchasing ferries.
Lease financing: This is a agreement between owner and contractor of the respective
asset which is leased by an organisation. Zylla can become lessee and acquirer new ferries for
providing services by lessor. Rentals can be easily fixed according to the lessor and lessee which
is highly flexible method.
TASK 2
Evaluation of various investment appraisal techniques and recommend their viability.
Organisations require investment appraisal techniques which can be also said as capital
budgeting techniques. It assist organisation in understanding that their investment will provide
them expected returns or not (Terlikowski and et.al., 2019). Zylla can identify the appropriate
method for expanding their business with the help of these techniques. Different investment
appraisal techniques are used by Zylla which are mentioned below:
Payback period: According to this technique, organisation evaluate the time period
which their project takes to generate revenue in order to recover the amount of investment. Zylla
can anticipate the time when their actual investment will touch the break even point. Businesses

expects that their payback period should be shorter so that they can generate profit in short
period of time.
Accounting rate of return: This technique suggest exact accounting earnings which can
be refer as net income (Šebestová, 2021). The net profit which organisation gain from the
investment is identified which assist in calculating the gains. Zylla can get their rate on
investment with this technique which helps in understanding the outcomes of investment.
Net present value: It is most common technique which businesses majorly use to
understand their outcomes. The total of discounted future outflows and incomes which are
involved in the investment. Zylla invest in buying ferries which assist them in expanding their
business.
It is evaluated that zylla can use net present value for identifying their effectiveness of
investment of buying new ferries. It shows positive cash flow in an organisation which suggest
their investment help them in expanding their business in effective manner.

CONCLUSION
From the above report it can be concluded that organisations need different sources of
finances in order to invest in machineries and equipment. This report have included about
various long term and short term sources of finances so that organisation can take capital from
them. Different investment appraisal techniques are described which are used by organisation in
order to identify the effectiveness of their investment.

REFERENCES:
Books and Journals
Bieliński, T. and Mosionek-Schweda, M., 2018. Green bonds as a financial instrument for
environmental projects funding. Unia Europejska. pl, 248(1), pp.13-21.
Gasanov and et.al., 2022. Sources of Financing of the Machine-Building Industry of the Rostov
Region: Analysis and Evaluation. In Business 4.0 as a Subject of the Digital
Economy (pp. 305-312). Springer, Cham.
Palmieri, R., Perrin, D. and Whitehouse, M., 2018. The pragmatics of financial communication.
Part 1: From sources to the public sphere. International Journal of Business
Communication, 55(2), pp.127-134.
Šebestová, J.D., 2021. Crisis Situation and Financial Planning for Sustainability: A Case of the
Czech SMEs. In Sustainable and Responsible Entrepreneurship and Key Drivers of
Performance (pp. 59-82). IGI Global.
Terlikowski and et.al., 2019. Modern financial models of nuclear power plants. Progress in
Nuclear Energy, 110, pp.30-33.