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A firm produces Rs 500 worth of goods per year, Rs 80 is the value of intermediate goods used by it during the year and Rs 30 is the value of capital consumption. What is the net value added per year?

Solution

✅ Correct Option: 4

Gross value added = value of output −- intermediate consumption =500−80=420= 500 - 80 = 420.

Net value added = GVA −- depreciation (capital consumption) =420−30=390= 420 - 30 = 390.

Hence net value added is Rs 390 per year.

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