1. **State the problem:** Calculate the initial yield of the commercial unit purchased by John and Marie. 2. **Definition and formula:** Initial yield is the ratio of the annual net income from the property to the purchase price, expressed as a percentage. $$\text{Initial Yield} = \frac{\text{Net Annual Income}}{\text{Purchase Price}} \times 100\%$$ 3. **Calculate Net Annual Income:** - Initial rent = 12500 (excluding GST) - Initial costs = 6500 (excluding GST) Net Annual Income = Initial rent - Initial costs $$= 12500 - 6500 = 6000$$ 4. **Calculate Initial Yield:** - Purchase price = 400000 $$\text{Initial Yield} = \frac{6000}{400000} \times 100\% = 1.5\%$$ 5. **Interpretation:** The initial yield of the unit at purchase was 1.5%, meaning the net income was 1.5% of the purchase price annually. **Final answer:** The initial yield is $1.5\%$.