Under a cash value policy, the theft of a $600 item with an estimated life of five years that was purchased three years ago and has a replacement cost of $900 would result in a payment from the insurance company of

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Under a cash value policy, the insurance company will pay for the value of the item at the time of the loss, minus any deductible. The value of the item after three years of use would be $240 ($600/5 years x 2 years of use), which is less than the replacement cost of $900. Therefore, the payment from the insurance company would be $240.

Under a Cash Value Policy, the Theft of a $600