Answer:
The insurance company will pay $192 which is present value of the asset
Explanation:
Depreciation is defined as the allocation of cost throughout the useful life of an asset. It refers to the rate at which an asset losses value over time.
The original value is used when calculating depreciation. Present market value is not used.
The value of the asset is spread out equally over its useful life.
In this instance
Depreciation per year= Asset value ÷ Years of useful life
Depreciation per year= 288 ÷ 6 = $48
The asset has been used for 2 years
Amount depreciated= 48 * 2= $96
Present value= Original value - Depreciation
Present value= 288 - 96= $192
