Question
6. Calculating actual cash value Actual Cash Value versus Replacement Cost Coverage The following table gives a partial list of Manuels significant property (that is,
6. Calculating actual cash value Actual Cash Value versus Replacement Cost Coverage The following table gives a partial list of Manuels significant property (that is, although only the first three items are listed within each category, the totals at the bottom of the table include the prices of unlisted property items). Item Purchase Price ACV Replacement Cost Furniture Couch set $3,500 $875 $3,850 Outdoor lawn furniture 3,125 1,563 3,750 Dining room table and chairs 1,000 500 1,200 Appliances TV 750 375 900 DVD player 125 75 150 Sound system 1,000 400 1,200 Furnishings Antique rugs 11,250 3,375 13,500 Sculptures 10,000 12,000 12,000 Throw blankets and pillows 375 225 450 TOTAL: $46,688 $30,347 $56,026 Manuel has a $52,000 HO-1 form insurance policy. No additional endorsements or floaters have been added to the policy. Therefore, the actual cash value (ACV) of his property covered under this policy and the replacement cost of his property covered. One of his more valuable items is a custom electric guitar he purchased when his band starting gaining popularity. He purchased the guitar 6 years ago for $2,500, and the total life expectancy is 10 years. The custom electric guitar he purchased when his band starting gaining popularity would cost $2,800 if it was purchased today. The actual cash value (ACV) of the guitar is
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started