Question: 1. Define, explain and indicate how to compute operating leverage = operating leverage (not to be confused with financial leverage = leverage leverage, they are

1. Define, explain and indicate how to compute operating leverage = operating leverage (not to be confused with financial leverage = leverage leverage, they are NOT the same).

2. In general, hotels (eg Hilton Hotel), highly automated companies (eg LEGO), and program companies (eg Microsoft) operate in industries that are constantly exposed to the negative effect of having operational leverage tall. Explain why and provide examples for each of the three industries.

3. What would you recommend to minimize the effect of operational leverage during the low season of a hotel?

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