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I agree with the others. If this was a survivor car in good shape i would definitely keep the original 318.
But since this car needs a full restoration i would also upgrade the engine.
I would put in a 426 Hemi or a Hellcat Crate Engine if it had to be modern.
This would make it a 6 figure car once done.
Regardless of which direction is chosen on the car direction, provided there is no Bowtie crossbreeding, it's going to be an outstanding learning experience for the students. There will be no end to teaching topics.