1. compute the return on investment (roi) for each division using the formula stated in terms of margin and turnover. 2. compute the residual income (loss) for each division. 3. assume that each division is presented with an investment opportunity that would yield a 7% rate of return. a. if performance is being measured by roi, which division or divisions will probably accept or reject the opportunity? b. if performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity?

Phoenix guitars is interested in pursuing backward integration to take greater ownership of the extraction of raw materials and production of components used in its signature line of guitars. although this approach would lower the overall cost of producing a guitar, the costs associated with producing electronic pickupsfor sound amplification are far greater than those associated with sourcing pickups from a reliable supplier. which of the following approaches is likely to produce superior results? a) invest in vertical integration despite the cost of producing pickups. b) abandon the idea of vertical integration entirely. c) pursue taper integration. d) introduce a budget line of guitars to diversify the firm's offerings.