A television set was purchased for $500 and had depreciated by $200 at the time of a fire loss. What is the actual cash value of the destroyed television?

The actual cash value (ACV) of an item is often determined by taking the replacement cost minus depreciation. In this case, the television was originally purchased for $500 and has depreciated by $200 due to wear and tear or other factors. To find the actual cash value, you subtract the depreciation from the original purchase price:

$500 (original cost) - $200 (depreciation) = $300 (ACV).

Thus, the actual cash value of the destroyed television is $300, reflecting both the depreciation that occurred and the remaining value of the item at the time of the loss. This calculation demonstrates how insurance claims are generally assessed, as they consider both the initial value and the reduction in value over time.