In a single day Raju, the barber, collects 500 from haircuts; over this day, his equipment depreciates in value by 50. Of the remaining 450, Raju pays sales tax worth30, takes home 3 200 and retains 220 for improvement and buying of new equipment. He further pays 20 as income tax from his income. Based on this information, complete Raju's contribution to the following measures of income: (1) Gross Domestic Product, (ii) NNP at market price, (iii) NNP at factor cost, (iv) Personal income, (v) Personal disposable income.
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Given Indirect taxes = Rs. 30, Personal tax = Rs. 20
Depreciation Rs. 50, Retained earnings = Rs. 220
∴
GDP
M
P
= Rs. 500
NNP
M
P
=
GDP
M
P
- Depreciation
= 500 - 50 = Rs. 450
NNP
F
C
=
NNP
M
P
- NIT
= 450 - 30 = Rs. 420
Personal Income =
NNP
F
C
- Retained earnings
= 420 - 220 = Rs. 200
Personal Disposable Income = Personal Income - Direct tax
= 200 - 20 = Rs.180
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