Question

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 $5,200 to replace today and had an estimated life of six years.

Answer 1

Answer:

the actual cash value coverage received is $2,600

Explanation:

The computation of the actual cash value coverage received is as follows;

= Furniture cost - (furniture cost ÷ estimated life × furniture age)

= ($5,200 - ($5,200 ÷ 6 years × 3 years)

= $5,200 - $2,600

= $2,600

Hence, the actual cash value coverage received is $2,600

It could be come after applying the above formula