[10 mark question]

Natasha Ibrahomovich, a fresh graduate, has recently joined as an investment analyst at a small investment company. At a recent departmental meeting, she came to know that her company was considering to invest in Pizza Hut and Mercedes-Benz. At the end of the meeting, her line manager, Megan Kelly, asked her to prepare a report describing the potential operating leverage structure of both Pizza Hut and Mercedes-Benz. Imagine yourself as Natasha and prepare the report. [Hints: You should comment on which company will have low or high operating leverage, and why.]