Net National Product at Factor cost

Net national product at factor cost is also called national income. If we deduct depreciation allowances from the gross national product at factor cost, we get net national product at factor cost.

NNP at Factor cost = GNP at Factor cost-Depreciation allowance

According to Peterson, “the net national product at factor cost is the sum total of net values added by all the producers in the domestic territory of the country plus net factor income from abroad.

NNP of Factor Cost = NDP at Factor Cost + Net Factor Income from abroad.