A firm produces Rs 1000 worth of goods per year, Rs 200 is the value of intermediate goods used by it during the year and Rs 100 is the value of capital consumption. What is the net value of total production?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Rs. 700 per year.
Given:
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Gross Output = Rs 1000
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Intermediate Goods (Intermediate Consumption) = Rs 200
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Capital Consumption (Depreciation) = Rs 100
NVA at MP=Gross Output−Intermediate Consumption−Depreciation
NVA at MP=1000−200−100 = Rs 700