Mr$.$ Xavier has a HO$-2$ contract with $$100,000$ dwelling coverage, $$50,000$ personal property coverage, and a $$500$ deductible. The dwelling is $50\%$ depreciated. Sewage back up into the basement and destroys the furnance, which will cost $$8,000$ to replace. The policy will pay. a$.$ nothing because of the water damage exclusion, b$.$ nothing because the property is not covered, c$.$ $$7,500$ because of replacement cost coverage, d$.$ $$3,500$ because of actual cash value and the deductible.