Value of output and Value added:

The value of output is the total value of goods and services produced by a firm or an economy, whereas value-added is the difference between the value of output and intermediate consumption.

Intermediate Consumption:

Intermediate consumption refers to the goods and services used up by a firm in the production process. These goods and services are not meant for final consumption but are used as inputs in the production process.

Difference between Value of output and Value added:

The difference between the value of output and the value-added is the intermediate consumption. In other words, it is the cost of the inputs used in the production process. It includes the cost of raw materials, energy, and other goods and services purchased by the firm.

Value-added is considered a better measure of a firm's contribution to the economy as it takes into account the cost of intermediate consumption. It is an important measure of economic performance as it reflects the amount of wealth created by a firm or an economy.

Depreciation, Net Indirect Taxes, and NFI:

Depreciation is the reduction in the value of an asset over time. Net indirect taxes are taxes that are paid by the firm but are ultimately passed on to the consumer. NFI (Net Factor Income) is the difference between the income earned by domestic factors of production and the income earned by foreign factors of production.

While these factors are important in calculating the national income, they are not part of the calculation of the value-added. Therefore, the correct answer to the given question is option 'B', which is intermediate consumption.