Actual cash value (ACV) is

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Actual cash value (ACV) is

A. Replacement cost minus depreciation.
B. Agreed value minus depreciation.
C. Replacement cost plus depreciation.
D. Replacement cost minus agreed value.

Answer: A. ACV is replacement cost minus depreciation.

Insurance

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An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?

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