In: Finance
What amount would a person with actual cash value (ACV) coverage receive for three-year-old furniture destroyed by a fire? The furniture would cost $7,500 to replace today and had an estimated life of six years. |
Insurance payment | $ |
Insurance payment = Replacement cost - Depreciation
Insurance payment = $7,500 - [($7,500 / 6) × 3]
Insurance payment = $3,750