What is computed by subtracting depreciation from replacement cost?

The actual cash value is determined by taking the replacement cost of an asset and deducting any depreciation that has occurred. This approach reflects the current value of the asset, considering its wear and tear or obsolescence over time.

In contrast, market value pertains to the price at which an asset could be sold in the open market and may not directly correlate with replacement cost or depreciation. Liquidation value refers to the estimated resale value of an asset when it is quickly sold, often in a distressed situation. Future value represents the anticipated worth of an investment at a specified point in the future, accounting for interest or returns but does not involve depreciation.

Therefore, the actual cash value is the most accurate assessment in this context, as it directly incorporates both the initial replacement cost and the asset's current state, providing a realistic economic value.