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Questions and Answers
What is the formula for Gross Value Added (GVA)?
What is the formula for Gross Value Added (GVA)?
- GVA = value added - depreciation
- GVA = value added / depreciation
- GVA = value added + depreciation (correct)
- GVA = value added * depreciation
How is Net Value Added calculated?
How is Net Value Added calculated?
- Net Value Added = Gross Value Added + depreciation
- Net Value Added = Gross Value Added / depreciation
- Net Value Added = Gross Value Added – depreciation (correct)
- Net Value Added = Gross Value Added * depreciation
In the milk-cheese example, what is the Net Value Added if the Gross Value Added is Rs 410 and depreciation is Rs 10?
In the milk-cheese example, what is the Net Value Added if the Gross Value Added is Rs 410 and depreciation is Rs 10?
- Rs 390
- Rs 400 (correct)
- Rs 405
- Rs 420
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Study Notes
Value Added Calculations
- The formula for Gross Value Added (GVA) is: GVA = Value of Output - Intermediate Consumption
- Net Value Added (NVA) is calculated by subtracting Depreciation from Gross Value Added (GVA): NVA = GVA - Depreciation
Example: Milk-Cheese Production
- In the milk-cheese example, if the Gross Value Added (GVA) is Rs 410 and Depreciation is Rs 10, the Net Value Added (NVA) would be: NVA = Rs 410 - Rs 10 = Rs 400
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