A new roof costs $10,000. Assume that the value of the roof depreciates 5% per year. If your roof is destroyed by fire after five years, then

A)

actual cash value is $7,500 and replacement cost is $10,000.
B)

actual cash value and replacement cost are $7,500.
C)

actual cash value and replacement cost are $10,000.
D)

actual cash value is $7,500 and replacement cost is $2,500.

A