In 1997, XYZ Company purchased several acres of land for $1,000,000. In 2019, the Federal Highway Administration announced that it planned to build an interstate highway, with exit and entrance ramps to be located within a few miles of this property. Based on this information, the appraised value of the property on December 31, 2019, was $25 million.

1. At what value should XYZ Company report this land in its December 31, 2019, balance sheet? Why?
2. Which value is more relevant? Why?
3. Assume that during 2019 the Federal Highway Administration decided not to build the highway. Instead, the state decided to place a landfill adjacent to this property. This reduced the appraised value of the property to $100,000. At what value should XYZ Company report this land in its December 31, 2019, balance sheet? Why?