The Functional Replacement Provision in Some Property Insurance Policies Is

question 36

Multiple Choice

The functional replacement provision in some property insurance policies is used when:

• A) replacing a lost item is impossible
• B) replacing a lost item is much cheaper than expected
• C) replacing a building will cost much more than its market value
• D) an insured set of objects is collectively worth more than the sum of its individual components

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Definitions:

Cash Discount

A discount given for a cash purchase.

Cost Of Goods Sold

The direct costs attributed to the production of goods sold by a company, including materials and labor.

Expensive Financing

Funding options for companies or individuals that come with high costs, often due to high interest rates or fees.

Credit Periods

The time frame allowed by a seller for a buyer to pay for goods or services received, usually measured in days.