To calculate net domestic product at factor cost by expenditure method, we

need to sum up all the expenditures on final goods and services produced
within the domestic territory of a country.
The expenditures are:
Private final consumption expenditure= 900cr.
Government final consumption expenditure= 100cr.
Domestic capital formation= 250cr.
Net exports= 50cr.
Net domestic product at factor cost= Private final consumption expenditure+
Government final consumption
expenditure+ Domestic capital
formation+ Net exports
=900cr.+100cr.+250cr.+50cr.
=1300cr.

To calculate national income by the value-added method, we need to sum up

the value added by each sector (primary, secondary, tertiary) and subtract
intermediate consumption and consumption of fixed capital

Value added by primary sector= Output of primary sector-Intermediate

consumption by primary Sector
= 900cr.-400cr.
= 500cr.
Value added by secondary sector= output of secondary sector-Intermediate
consumption by Secondary sector
= 800cr.-300cr.
= 500cr.
Value added by tertiary sector= Output of tertiary sector- Intermediate
consumption by tertiary Sector
= 400cr.-100cr.
= 300cr.

Total Value added= Value added by primary sector+ value added by secondary
sector+ value added by tertiary sector
= 500cr.+500cr.+300cr.
= 1300cr.
National Income= Total value added – Consumption of fixed capital
= 1300cr. – 80cr.
= 1220cr.

Note: Indirect taxes and subsidies do not affect the calculation of net domestic
product at factor cost and national income by the value-added method.