Impact of Leverage on investment Mary uses $500,000 of her cash to purchase 40 acres of land with a total cost of $500,000. Mary is not using financial leverage. Sue uses $500,000 of her cash and borrows $1,000,000 to purchase 120 acres of land having a total cost of $1,500,000 Sue is using financial leverage to own/control $1,500,000 of property with only $500,000 of her own money. Let's also assume that the interest on Sue's loan is $50,000 per year and it is paid at the beginning of each years, What is the return on equity(investment) for Mary and Sue if the land was appreciated by 20% next year? What if the land was depreciated by 20%