Intermediate cost =10000 Value of change in stock =1000Units of output...
Understanding NDPmp Calculation
Net Domestic Product at Market Prices (NDPmp) is a crucial economic indicator that represents the total value of goods produced and services provided in a country during a certain period, minus depreciation.
Key Components for Calculation
- Intermediate Cost: 10,000
- Value of Change in Stock: 1,000
- Units of Output: 775
- Price per Unit: 40
- Import Duty: 2,000
- Consumption of Fixed Capital: 3,000
Calculation Steps
1. Calculate Gross Value of Output:
- Gross Value of Output = Units of Output × Price per Unit
- Gross Value of Output = 775 × 40 = 31,000
2. Calculate Net Value of Output:
- Net Value of Output = Gross Value of Output - Intermediate Cost
- Net Value of Output = 31,000 - 10,000 = 21,000
3. Add Change in Stock:
- Adjusted Net Value = Net Value of Output + Value of Change in Stock
- Adjusted Net Value = 21,000 + 1,000 = 22,000
4. Subtract Import Duty:
- Adjusted Value = Adjusted Net Value - Import Duty
- Adjusted Value = 22,000 - 2,000 = 20,000
5. Deduct Consumption of Fixed Capital:
- NDPmp = Adjusted Value - Consumption of Fixed Capital
- NDPmp = 20,000 - 3,000 = 17,000
Final Result
The Net Domestic Product at Market Prices (NDPmp) is 17,000. This value reflects the economic output after accounting for depreciation and intermediary costs, providing a clearer picture of the economic performance.
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