Question

It will cost Sally $5,000 to put a new roof on her home to replace a roof destroyed in a windstorm. Assume that the original roof, which Sally paid $3,500 for 10 years ago, depreciated $300 per year. What was the actual cash value of the roof that was destroyed

A) $1,000
B) $2,500
C) $500
D) $3,500

Answer 1

C) $500

Step-by-step explanation:

See the attached spreadsheet. -Subtracting $300 every year for 10 years leaves $500 of value.

Answer 2

The actual cash value of the roof that was destroyed is $500.

Step-by-step explanation:

To calculate the actual cash value of the roof that was destroyed, we need to subtract the total depreciation from the original cost of the roof. The total depreciation can be found by multiplying the annual depreciation ($300) by the number of years (10) since Sally bought the roof. So, the total depreciation is $300 * 10 = $3000.

To find the actual cash value, we then subtract the total depreciation from the original cost of the roof. Therefore, the actual cash value of the destroyed roof is $3500 - $3000 = $500.