A 46-inch HDTV originally purchased for $5000 has a life expectancy of seven years. It is five years old and has been destroyed in a fire. Your cash value policy will

Question

Quizplus · Accepted Answer

With a cash value policy, the settlement amount takes into account the current value of the item, which decreases with age and use. The accumulated depreciation on this 5-year-old TV is approximately $3572, which would be subtracted from the original purchase price of $5000 to determine the cash value settlement. Therefore, the best option is to take the settlement amount, which is choice C.

A 46-Inch HDTV Originally Purchased for $5000 Has a Life