In the context of insurance, "actual cash value" refers to which of the following?

"Actual cash value" is defined as the replacement cost of an item minus depreciation. This means that when an insurer calculates the actual cash value of a lost or damaged item, they consider what it would cost to replace the item at current market rates, while also taking into account the decrease in value due to age, wear and tear, or obsolescence.

This approach ensures that the insured party receives a payout that reflects the item's current worth rather than its original purchase price or value before depreciation. By focusing on replacement cost minus depreciation, actual cash value provides a more accurate representation of what the insured item is worth at the time of loss.

Other options define related concepts but do not accurately capture the specific definition of actual cash value. For instance, replacement cost without depreciation implies full value restoration, which is not aligned with the principle of providing an equitable settlement that reflects the diminishing value of an asset over time.