Which of the following factors will be considered when determining the amount of depreciation to be used in the determination of actual cash value?

When assessing the amount of depreciation to determine the actual cash value of an asset, the normal life expectancy of the item plays a critical role. Actual cash value is generally calculated as the replacement cost of the item minus depreciation. The concept of normal life expectancy helps insurers estimate how long an asset is expected to last under typical conditions.

By evaluating the expected lifespan, insurers can fairly apply depreciation to account for wear and tear over time, thus reflecting a more accurate value of the asset after considering its age and condition. If an asset has a shorter than average life expectancy, its depreciation would be greater, reflecting its diminished value in the market.

Other factors such as purchase price and accrued accounting depreciation are also relevant but do not directly consider the condition of the item based on its expected usage. Sentimental value, while important to the owner, does not have any bearing on the economic valuation used by insurers, as actual cash value calculations are based on market principles rather than emotional attachments.