David Has a Homeowners 3 Policy That Provides $280,000 of Insurance

question 12

Multiple Choice

David has a Homeowners 3 policy that provides $280,000 of insurance on his dwelling,which has a current replacement value of $400,000.Ignoring any deductible,how much will David collect if a roof with a replacement value of $16,000 but an actual cash value of $10,000 is destroyed in a fire?

• A)$10,000
• B)$12,000
• C)$14,000
• D)$16,000

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Definitions:

Tax Liability

The total amount of tax that an individual or business owes to the government.

Average Tax Rate

The proportion of total income that is paid as taxes, calculated by dividing the total amount of taxes paid by the total income.

Elastic Supply

A situation where the quantity supplied of a good responds significantly to changes in its price.

Subsidy Benefit

Subsidy Benefit refers to the financial advantage received by individuals or businesses from government subsidies, intended to promote certain activities or lower costs.