Taylor purchased a 20-year-old house for $200,000. The house has an estimated useful life of 80 years. Taylor insured the house for $200,000. The replace- ment cost of a similar house with materials of like kind and quality is $240,000. The house is totally destroyed in a tornado.

a. Based on the actual cash value rule, how much will Taylor collect from her insurer (ignore any deductible)?

b. If the loss occurs in a state with a valued policy law, how much will Taylor collect from her insurer (ignore any deductible)?