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Find Net Value Added at Market Price - Economics

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Find net value added at market price:

    (Rs lakh)
(i) Fixed capital good with a life span of 5 years 15
(ii) Raw materials 6
(iii) Sales 25
(iv) Net change in stock (-)2
(v) Taxes on production 1
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Solution

Value of output = Sales +Change in stock

= 25 - 2

= Rs 23 lakh

Gross value added at MP = Value of output - Intermediate consumption

Gross value added at MP = 23 - 6 = Rs 17 lakh

NVAMP = GVAMP - Depreciation

`=17-("Cost of producer goods"/"No of useful life in years")`

`=17 - ((15"lakhs")/5)`

=17 - 3 = Rs 14 lakh

Concept: Aggregates Related to National Income - Gross Value Added and Net Value Added
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