An Evaluation of Investment Project in Gaziantep Footwear Industry: NPV and IRR Approach (Örnek Olay)

• Published in: Journal of Accounting & Finance / Muhasebe ve Finansman Dergisi no. 89
• Main Authors: Ömer UÇTU, KARACA, Cengizhan, UCTU, Ramazan
• Format: Journal Article
• Language: English
• Published: Istanbul Turkish Association of Accounting and Finance Academicians - AAFA 01-01-2021
• Subjects: Accreditation; Footwear industry; Internal rate of return; Net present value; Product testing; Testing laboratories; Turkey; Gaziantep Turkey
• ISSN: 1304-0391; 2146-3042

Turkey’s Gaziantep province received tremendous support from the government in many industries such as carpet, textile, food, footwear, agriculture and tourism taking the lead. Gaziantep has been continuously developing and operating in the footwear manufacturing sector for several decades. But the absence of an accredited test laboratory for the footwear industry in the region, the high costs and time losses caused by the regional producers having to carry out these tests in Istanbul, Gaziantep-based manufacturers have had to initiate the establishment of the Accredited Test Laboratory in their province. The aim of this study is to investigate whether investment in the shoe testing laboratory is feasible for the Gaziantep footwear industry. A purposeful field study was carried out for the shoe sector and a face-to-face survey was carried out in 11 large companies. The data obtained were analyzed in terms of economic and financial analysis using Net Present Value (NPV) and Internal Rate of Return (IRR) methods. As a result of the findings, it has been determined that the investment is feasible and the establishment of an accredited test laboratory in Gaziantep will contribute to both Gaziantep and the Southeastern Anatolia Region in Turkey.