In a loss settlement, how does depreciation affect the value used to determine actual cash value?

In a loss settlement, how does depreciation affect the value used to determine actual cash value?

• A. Replacement cost reduces to actual cash value due to depreciation.
• B. Depreciation is added to the replacement cost to determine value.
• C. Depreciation reduces value to determine actual cash value.
• D. Depreciation has no effect on loss settlement.

Answer: (C)