1) Consider the following two stocks, A and B.

F722GUIDELINES FOR CASE REPORTSTHE ASSIGNMENT: Prepare an action-oriented report that presents concisely your analysis and recommendations for the problems you choose to address. The case is very loosely based on a real company. Restrict the report to no more than 1200 words typewritten, double-spaced. If at all possible,please use Microsoft Word.GENERAL GUIDELINES: The report should consist of four sections: an executive summary, problem analysis, recommendations, and limitations. Clearly state your assumptions. Be selective. Do not regurgitate case facts. Summary tables in the text are encouraged for quantitative information. In addition to the report, you may supply figures (visual representations of information contained in the text), and exhibits. Make sure these are referenced in the text. Do not use the exhibits to effectively violate the word limit. The report should stand alone, and the exhibits should provide only the documentation or details of a technical analysis. However, the exhibits should be easily understood. Please insure that variables are defined and assumptions stated. Try to bring as much realism to the report as the case context will allow. Outside research pertaining to the industry or the problem is permitted.EXECUTIVE SUMMARY: State the problems you choose to address. If you do not intend to address all of the major problems in your recommendations, then indicate which one(s) you do intend to address. For a rich case, choosing which topics to address is an important task. For example, do not choose a minor problem with an obvious answer. Next, summarize your recommendations. This section of the report should consist of one to two paragraphs.PROBLEM ANALYSIS: Provide the analysis necessary to support your statement of the problems. Indicate the significance or importance of the problems through discussion of their magnitude, urgency, difficulty and/or consequences of a delay in addressing them. Discuss causal relationships whenever possible. You may include a discussion of secondary problems. Indicate why you think these are secondary.RECOMMENDATIONS: State clearly your recommendations. Take a stand for action. Do not merely suggest “more study” or “call in a consultant.” Direct your recommendations to eliminating the underlying causes, not merely minimizing or elimination the symptoms. Indicate precisely how these will help to alleviate the problem. Include the most significant and relevant facts, assumptions and principles. Include computational support where appropriate. You may want to discuss major alternatives that you rejected with a brief explanation of your reasons for rejecting them. Discuss the results you expect in greater detail, give support, and indicate when you anticipate the realizations of the benefits.LIMITATIONS: Discuss limitations of your analysis or recommendations NOT case limitations. These might include assumptions you made but do not feel comfortable with, or impediments to success that may prove more difficult than you expect. Discuss potential disadvantages of your recommendations.Please contact me if you any questions.SOFT ROCK HOTELChicagoSoft Rock Hotel is an up-scale hotel chain operating in many large cities. The hotel chain is attempting to appeal to a younger, up-scale clientele. Properties are primarily located in large, urban cities. The firm is relatively decentralized and focuses on financial performance measures and reporting. This case primarily focuses on Soft Rock Chicago – one of the properties in the hotel chain.The General Manager of Soft Rock Chicago, John Hyatt, is primarily controlled on hotel profitability when discussing his performance with corporate (along with some other measures such as occupancy rates, customer satisfaction etc.) Soft Rock Hotel General Managers are given wide decision making latitude as long as they “bring in the numbers.” A large portion of John’s bonus is explicitly linked to Chicago hotel profitability.Given the focus on financial results at the corporate and hotel reporting levels, John has decided to analyze the performance of the Chicago hotel operating departments (housekeeping, dining etc.) on financial performance.One of the hotel departments is housekeeping. Anna Van Degna, supervisor, of housecleaning for Soft Rock Chicago, was surprised by her summary performance report for March excerpted below.SOFT ROCK HOTELHousekeeping Performance ReportFor the Month of MarchActualBudgetVariance% Variance$164,423$154,000$10,423 U6.768% UAnna was disappointed. She thought she had done a good job controlling housekeeping labor and materials usage but her performance report revealed an unfavorable variance of $10,423. She had been hoping for a bonus for her good work but now expected a series of pointed questions from John Hyatt, her direct report manager.The cost budget for housekeeping is based on standard costs. At the beginning of a month, Anna receives a report from Soft Rock Hotel’s Sales Department outlining the planned room activity for the month. Anna then schedules labor and materials using this information. The March budget for the housekeeping was based on 8,000 room nights. Each room night is budgeted based on the following standards for various materials, labor, and overhead:Shower Supplies………………………………………….3 bottles @ $0.25 eachTowels*………………………………………….1 @ $2.00Laundry………………………………………….10 lbs. @ $0.35 a lbLabor………………………………………….½ hour @ $12.00 an hourVOH………………………………………….$6.00 per labor hourFOH………………………………………….$4 a room night (based on 8,000 room nights)*Replacement for towels evaluated by housekeeping as inappropriate for cleaning and reuse.With 8,900 room nights sold, actual costs and usage for housekeeping during April were:$6,890 for 26,500 bottles of shower supplies.$15,563 for 7,900 towels.$31,329 for 88,500 lbs. of laundry.$51,591 for 4,350 labor hours.$25,839 in total VOH$33,211 in FOHIn their monthly meeting management meeting, Anna voiced her disappointment to John. She stated that her instincts told her that the department was operating efficiently and was puzzled why this was not reflected in the financial management report. In addition, she argued that the large focus on financial results was not providing the information she needed or used on a daily basis. John told Anna that “numbers do not lie.” He was concerned, however, that Anna’s frustration may harm her morale and motivation. He told her he would give the current situation more thought.Given this situation, John hired the world famous performance management consultant, Willy Smart of Perrin Towers to analyze the situation. Specifically, John tasked Willy with analyzing current performance and making suggestions on improving the performance measurement system.Assignment: Prepare Willy’s report. Please see the Soft Rock Instructions for more detail on report preparation.