In Q21 Net Value Added at Factor Cost = Income Generated = NDP at FC
Now Sales - Purchase of raw material = GDP at MP (900)
GDP at MP - Depreciation - Net Indirect Taxes = NDP at FC
900 - 200 - (150-50) =600 = NDP at FC
However the answer is 800 crores
So what's the error ????
21. From the data given below, prove that 'Net Value Added at Factor Cost' is equal to 'Income Generated'
Dear student,
The error is that you have not taken into account the change in stock (closing stock - opening stock). Its value is 200 (400 - 200).
When this taken into account the value becomes:
Now Sales + change in stock - Purchase of raw material = GDP at MP (1100)
GDP at MP - Depreciation - Net Indirect Taxes = NDP at FC
1100 - 200 - (150-50) =800 = NDP at FC
The error is that you have not taken into account the change in stock (closing stock - opening stock). Its value is 200 (400 - 200).
When this taken into account the value becomes:
Now Sales + change in stock - Purchase of raw material = GDP at MP (1100)
GDP at MP - Depreciation - Net Indirect Taxes = NDP at FC
1100 - 200 - (150-50) =800 = NDP at FC