Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

Calculate compensation of employees from the following items :

Items Rs in Crores
Profit after tax 20
Interest 45
$GDP_{MP}$ 200
Goods and service tax 10
Depreciation 50
Rent 25
Corporate tax 5

Choose the correct option.

Options:

45 crores

42 crores

50 crores

44 crores

Correct Answer:

45 crores

Explanation:

The correct answer is option (1) : 45 crores

Compensation of Employees = GDP at MP - (Profit after tax + Interest + Goods and Service Tax + Depreciation + Rent + Corporate tax)

Given:

  • Profit after tax = Rs 20 crores
  • Interest = Rs 45 crores
  • Goods and Service Tax = Rs 10 crores
  • Depreciation = Rs 50 crores
  • Rent = Rs 25 crores
  • Corporate tax = Rs 5 crores
  • GDPMP = Rs 200 crores

Substitute the values into the formula:

Compensation of Employees = 200 - (20 + 45 + 10 + 50 + 25 + 5) = 200 - 155 = Rs 45 crores

So, the correct option is: 45 crores