Chavez Company purchased a property (including land and building). The company acquired the property in exchange for a 15-year mortgage for $900,000. Their insurance company appraised the components as follows: Land $200,000 Building 700,000 Parking lot 100,000 What should be the cost basis for the building?

A. $500,000
B. $600,000
C. $630,000
D. $622,222

Ans: C. $630,000

Business

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