ABC Company insured its building on a replacement cost basis for $$700,000$ under a property insurance policy that included an $80\%$ coinsurance clause. The building had a replacement cost of $$1$million when it sustained a $$40,000$ loss. How much will ABC Company receive from its insurer, assuming no deductible applies?

Question $35$Answer

a$.$

$$40,000$

b$.$

$$33,333$

c$.$

$$35,000$

d$.$

$$36,000$