What is the actual cash value (ACV) of Melanie's home after a 25% depreciation?

To determine the actual cash value (ACV) of Melanie's home after a 25% depreciation, it is crucial to understand how depreciation affects the value of an asset. The ACV is often calculated as the replacement cost minus any depreciation.

If we assume that the original value of Melanie's home is $90,000, a 25% depreciation would mean that 25% of the home's value is subtracted from its original worth. The calculation is as follows:

1. Calculate 25% of $90,000:

[

0.25 \times 90,000 = 22,500

]

2. Subtract the depreciation from the original value:

[

90,000 - 22,500 = 67,500

]

Thus, the actual cash value of Melanie's home after applying the 25% depreciation would be $67,500. This makes the answer correct as it accurately reflects how depreciation diminishes an asset's value and how ACV can be derived from that calculation.