Question

An item, with a replacement cost of $2,500 and depreciation of $800, is destroyed. What is the actual cash value of the loss?

Answer 1

The actual cash value of an item that was destroyed, with a replacement cost of $2,500 and depreciation of $800, is calculated by subtracting the depreciation from the replacement cost, resulting in $1,700.

Step-by-step explanation:

The actual cash value of the loss can be calculated by subtracting the depreciation from the replacement cost of the item. In this case, the item has a replacement cost of $2,500 and depreciation of $800. Therefore, the actual cash value of the item if it is destroyed would be:

Actual cash value = Replacement cost - Depreciation

Actual cash value = $2,500 - $800

Actual cash value = $1,700

The actual cash value of the item that was destroyed is $1,700.