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6. Calculating actual cash value Actual Cash Value versus Replacement Cost Coverage The following table gives a partial list of Lorenzo's 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 3,125 1,563 3,750 Outdoor lawn furniture Dining room table and chairs Appliances 1,000 500 1,200 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 Lorenzo has a $58,000 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