In the preceding videos, you learned that using borrowed money to finance a real estate investment creates leverage, as it enables investors to buy properties that cost more than the money currently available to them. Suppose you want to buy an investment property that costs $1 million and will provide a steady cash flow, but you only have $500,000. Would you find an equity joint-venture partner to provide the other $500,000, or would you take out a loan for the money you need?  Consider the following questions when formulating your discussion: Would you feel comfortable sharing management and control with an equity partner?  Would you be content with the risk and return presented by the property asset itself, or would you want to pursue a higher return even though it will mean taking on more risk? Would you be willing (and able) to give up a part of the cash flow of the property to prioritize servicing the loan? What would the interest rate and terms of the loan be in relation to the cash flow yield rate and total return expectation for the property?

Some years ago, the Federal government cut the GST (the federal sales tax on goods and services which Ontario later blended into the PST to create the HST) by two percentage points. The federal government could have transferred this cut to income taxes instead, i.e. it could have decreased taxes on income instead of on the GST. Sources of income that taxes are paid on include labour (work) as well as investment earnings. Assuming that taxes are to be cut, which tax cut do you believe is more beneficial for long run economic growth, a GST/HST reduction or an income tax reduction? Assume that either of the reductions would be revenue neutral, i.e., the federal government would forfeit the same amount of revenue with either tax that is cut. You are to use as many economic tools that you have learned in this course to justify your argument. You are quite welcome and encouraged to utilize outside sources. Please be sure to reference your sources. Assume that either of the tax cuts will result in the same decrease in revenues for the government. Your assignment should be at least 500 to about 750 words in length. You are to back up your argument with sound economic reasoning and use concepts learned in this course. .