Net replacement cost is equal to
A)actual market value.
B)trade-in value.
C)new market value
D)replacement cost less the market value of the trade-in.

Question

Quizplus · Accepted Answer

Net replacement cost is the cost of replacing an asset with a new one, minus any value received for trading in or selling the old asset. Therefore, it is equal to the replacement cost less the market value of the trade-in. Option A is incorrect because actual market value may not necessarily reflect the cost of replacing the asset. Option B is incorrect because trade-in value only considers the value received for the old asset, but does not take into account the cost of the new asset. Option C is incorrect because new market value does not account for any trade-in or selling value of the old asset.

Net Replacement Cost Is Equal to