giving reasons certify whether the the expenditure are final or intermediate exp.
1) on maintenance of office building
2) on improvement of a machine in a factory
3) purchase of furniture by a firm
Hey Aman,
1. The expenditure on maintenance of an office building and expenditure for the improvement of a machine in a factory will be considered as intermediate expenditure. This is because such expenditures are made to enhance the already existing operations of the firm.
2. Purchase of furniture by a firm is a final good as it is purchased by the firm for long-term final consumption . However, if the same furniture is purchased by a furniture producing firm , then it will be considered as an Intermediate good as it will be used by the firm as a raw material for resale or further value addition.
Keep Posting!!
1. The expenditure on maintenance of an office building and expenditure for the improvement of a machine in a factory will be considered as intermediate expenditure. This is because such expenditures are made to enhance the already existing operations of the firm.
2. Purchase of furniture by a firm is a final good as it is purchased by the firm for long-term final consumption . However, if the same furniture is purchased by a furniture producing firm , then it will be considered as an Intermediate good as it will be used by the firm as a raw material for resale or further value addition.
Keep Posting!!