To estimate potential property losses, risk managers must know:
A) the accounting book value of property
B) the replacement cost of property
C) the actual cash value of property
D) the original purchase price of property

Question

Quizplus · Accepted Answer

The replacement cost of property is the estimated cost to replace or repair the property in the event of a loss, and is therefore the most appropriate measure for determining potential property losses. The accounting book value, actual cash value, and original purchase price of property do not necessarily reflect the true value of the property and may not provide an accurate estimate of potential losses.

To Estimate Potential Property Losses, Risk Managers Must Know