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Question : A company produces goods worth INR 1,500,000. It incurs intermediate consumption of INR 500,000 and pays wages of INR 300,000. The company also receives indirect taxes of INR 200,000 and subsidies of INR 100,000. What is the value added by the company?

 

Option 1: INR 400,000

Option 2: INR 500,000

Option 3: INR 800,000

Option 4: INR 700,000


Team Careers360 3rd Jan, 2024
Answer (1)
Team Careers360 17th Jan, 2024

Correct Answer: INR 800,000


Solution : The correct answer is (c) INR 800,000

Total value of goods produced: INR 1,500,000

Intermediate consumption: INR 500,000

Wages: INR 300,000

Indirect taxes: INR 200,000

Subsidies: INR 100,000

To calculate the value added, we can use the formula:

Value added = Total value of goods produced - Intermediate consumption - Wages + Indirect taxes - Subsidies

Value added = INR 1,500,000 - INR 500,000 - INR 300,000 + INR 200,000 - INR 100,000

Value added = INR 800,000

Therefore, the value added by the company is INR 800,000.

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