The Chicago Corporation acquired a piece of land in a business combination transaction from the Milwaukee Corporation, an unrelated company. The land originally cost $750,000 when purchased by...

The Chicago Corporation acquired a piece of land in a business combination transaction from the Milwaukee Corporation, an unrelated company. The land originally cost $750,000 when purchased by Milwaukee Corporation. The fair value of the land has subsequently been considered by Chicago Corporation for two different purposes, one as a site for a storage facility and the other as site for a grocery store.  If the land is used to develop as a storage facility the fair value was estimated to be $1,000,000 and alternatively, the land for the grocery store is  estimated to be $1,250,000. The land is currently zoned for both purposes. Chicago Corporation intends to use the property to develop as a storage facility.

 Which value should the Chicago Corporation use in its financial statements for the land? (do not use dollar signs, commas or decimals in your answer)

What fair value principle did you use to determine the fair value?