CA Foundation P4 · Chapter 5 · Question 2 of 15
Given: GDP at market prices = Rs. 5,000 crore; depreciation = Rs. 400 crore; net factor income from abroad = -Rs. 100 crore; net indirect taxes = Rs. 300 crore. NNP at factor cost (national income) is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Rs. 4,200 crore
Explanation
GNP at MP = GDP at MP + NFIA = 5,000 + (-100) = 4,900. NNP at MP = 4,900 - 400 = 4,500. NNP at FC = NNP at MP - net indirect taxes = 4,500 - 300 = Rs. 4,200 crore. Rs. 4,400 crore results from treating NFIA as +100 instead of -100 (5,000 - 400 + 100 - 300).
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