Question

From the following data about a firm, estimate the net value added at factor cost by

the firm. (4)

ITEMS (Rs. In lakhs)

(1) Domestic Sales 2,500

(2) Subsidies 40

(3) Purchase of raw materials in the domestic market 500

(4) Exports 200

(5) Depreciation 100

(6) Import of raw materials 60

(7) Net Indirect taxes 60

(8) Closing stock 250

(9) Opening stock 150​

Answer 1

Answer:

Value of output = Sales +Δ in Stock

⟹ Value of Output =20+2

⟹ Value of Output =Rs.22 lakhs

Gross Value added at MP = Value of Output − Intermediate Consumption

Gross Value added at MP =22−5=Rs.17 lakhs

NVA

FC

=GVA

MP

− Depreciation − Net Indirect Tax

⟹NVA

FC

=17−(

No. of useful life in years

Cost of producer goods

)−(Indirect Tax - Subsidy)

⟹NVA

FC

=17−(

10

10lakh

)−(1−0)

∴NVA

FC

=Rs.17−1−1=15 lakhs

Note: Here, single use producer goods are considered as raw materials that were used in the production process.