Mr. Smith acquired a property consisting of one acre ofland and a two-story building five years ago for S I 00,000. He also obtained an 580,000 mortgage loan from ACE Bank to provide financing to complete the purchase. This year, Mr. Smith constructed another building on the pr~p~rty with his OWJl funds at a cost of $20,000. Mr. Smith has decided after compl~ing the bUl ldmg to approach Duce Bank to borrow and mortgage the new building with a S 16,000 loan.

Is Duce Bank li ke ly to provide the S 16,000 in financing? What other options may Mr. Smith have to consider?

AppendixLO1