3 Questions
What is the formula for Gross Value Added (GVA)?
GVA = value added + depreciation
How is Net Value Added calculated?
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?
Rs 400
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
Test your knowledge about gross and net value added with this quiz. Learn how to calculate these important economic indicators.
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