Question

Discussion Question 1-9 (LO. 4) The Adams Independent School District wants to sell a parcel of unimproved land that it does not need. Its three best offers are as follows: Organization/Company Offer Proposed Use The State's Department of Public Safety (DPS) $2.3 million New state highway patrol barracks The Second Baptist Church $2.2 million Start a church school Baker Motors $2.1 million Open a car dealership If you are the financial adviser for the school district, which offer would be probably be preferable from a long-term financial standpoint? would probably be preferable since it would be subject to ad valorem taxes.

Answer 1

The Adams Independent School District

Preferable offer for the sale of a parcel of unimproved land:

Baker Motors $2.1 million to open a car dealership

Step-by-step explanation:

a) Data:

Organization/Company Offer Proposed Use

The State's Department

of Public Safety (DPS) $2.3 million New state highway patrol barracks

The Second Baptist

Church $2.2 million Start a church school

Baker Motors $2.1 million Open a car dealership

b) From a long-term perspective, the probably preferable offer is the Baker Motors $2.1 million to open a car dealership. It is a business whose sales will be subject to ad valorem taxes, which will yield income for the local and state governments, who fund the School District.