Farmer Joe owns farmland along a busy highway. Farmer Joe originally paid
$500,000
for this land. The land sat on top of a reservoir of oil, which when pumped out resulted in total depletion expenses to Farmer Joe of
$125,000
. The farmland currently has a value of
$600,000
if it is used as farmland; however, a developer who wants to build a shopping plaza on the farmland has offered Farmer Joe
$850,000
for the farmland. What is the fair value of the farmland? A.
$375,000
B.
$500,000
C.
$600,000
D.
$850,000

Question

Farmer Joe owns farmland along a busy highway. Farmer Joe originally paid

$500,000

for this land. The land sat on top of a reservoir of oil, which when pumped out resulted in total depletion expenses to Farmer Joe of

$125,000

. The farmland currently has a value of

$600,000

if it is used as farmland; however, a developer who wants to build a shopping plaza on the farmland has offered Farmer Joe

$850,000

for the farmland. What is the fair value of the farmland? A.

$375,000

B.

$500,000

C.

$600,000

D.

$850,000

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