vertically integrated subsidiary, accounting homework help

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vertically integrated subsidiary, accounting homework help

In some cases, one of the purposes of initiating a business combination is to control your value chain through vertical integration.

Consider the following two independent scenarios:

  1. General Motors relies on an unrelated company for a key component
  2. General Motors relies on a vertically integrated subsidiary for a key component

Discuss the pros and cons of both scenarios. Specifically address how a subsidiary that provides products only to the parent can be fairly evaluated on performance. What do you believe is the best option for General Motors? Explain.

Please make this at least 1-2 paragraphs.

Please site sources within the paragraphs.