Question

Amcott Loses $3.5 Million; Manager Fired On Tuesday software giant Amcott posted a year-end operating loss of $3.5 million. Reportedly, $1.7 million of the loss stemmed from its foreign language division. With short-term interest rates at 7 percent, Amcott decided to use $20 million of its retained earnings to purchase three-year rights to Magicword, a software package that converts generic word processor files saved as French text into English. First-year sales revenue from the software was $7 million, but thereafter sales were halted pending a copyright infringement suit filed by Foreign, Inc. Amcott lost the suit and paid damages of $1.7 million. Industry insiders say that the copyright violation pertained to "a very small component of Magicword." Ralph, the Amcott manager who was fired over the incident, was quoted as saying, "I'm a scapegoat for the attorneys [at Amcott] who didn't do their homework before buying the rights to Magicword. I projected annual sales of $7 million per year for three years. My sales forecasts were right on target. Do you know why Ralph was fired?

Answer 1

Ralph was fired because he was seen as responsible for the copyright infringement issue with the Magicword software, leading to financial losses for Amcott.

Step-by-step explanation:

Ralph was fired from Amcott because he was held responsible for the loss that stemmed from the copyright infringement suit related to Magicword, the software that converted French text files into English.

Despite his accurate sales forecasts, which projected annual sales of $7 million, the failure to recognize the copyright infringement issue which led to a halt in sales and a substantial financial loss for the company was deemed a significant managerial oversight. His claim of being a scapegoat suggests that he felt others were to blame for not properly investigating the legality of Magicword before its purchase.