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Chapter One – BayeAmcott Loses $3.5 Million; Manager FiredOn Tuesday software giant Amcott posted a year-end operatingloss of $3.5 million. Reportedly, $1.7 million of the loss stemmedfrom its foreign language division.With short-term interest rates at 7 percent, Amcott decided touse $20 million of its retained earnings to purchase three-year rightsto Magicword, a software package that converts generic wordprocessor files saved as French text into English. First year salesrevenue from the software was $7 million, but thereafter sales werehalted pending a copyright infringement suit filed by Foreign, Inc.Amcot lost the suit and paid damages of $1.7 million. Industryinsiders say that copyright violation pertained to “a very smallcomponent 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 toMagicword. I projected annual sales of $7 million per year for threeyears. My sales forecast were right on target.”Do you know why Ralph was fired?