One of a series of three self-instructional units, these materials are aimed at helping British hotel and catering managers improve profits and/or reduce costs in their areas of responsibility. Following a paragraph on how to use the unit and an introduction, section 1 covers control levels as the framework for making decisions. The section includes these trainee objectives and pencil and paper activities to help trainees meet them: (1) identify the appropriate control level for a given management position; and (2) outline the involvement that a department or unit manager in a hotel or catering business should have in pricing, investment, and budget preparation. Section 2 covers pricing decisions and includes pencil and paper activities to help trainees meet these objectives: (1) identify the minimum price necessary to cover marginal costs; (2) understand the psychological aspects of pricing that influence sales volume; (3) identify opportunities for using differential pricing in hotel and catering businesses; (4) understand how to review prices, based on past data and competitive information; and (5) understand how to use backward pricing techniques for new businesses. Section 3 covers investment decisions and includes pencil and paper activities to help trainees meet these objectives: (1) understand the difference between revenue earning and defensive investments; (2) estimate the cash flow from investments, taking taxation into account; and (3) use discounted cash flow techniques to evaluate investment decisions. (CML)