This assignment has two parts.
Fountain of Youth (FOY) Incorporated is a corporation that recently started selling a new over the counter anti-aging pill, Eternally Yours. Despite brisk sales over the past quarter, sales and management team members have been receiving feedback from customers and retailers that the product has some unanticipated side effects. The product is not lethal, but the typical complaints include allergic reactions, rashes, sever skin peeling, and in very rare instances, blindness.
Technicians at FOY have indicated they could recall and reformulate Eternally Yours, but that would result in significant revenue loss, negatively impact share price for stockholders, and jeopardize your position as chief executive officer (CEO).
The accounting department advises that the likelihood of customers formally filing a complaint is fairly low (under 10% of all purchasers) and that the typical claims can be settled easily, since no one has experienced lethal responses to using Eternally Yours. The legal department states that the product packaging says it is not FDA-approved, and that most people that sustain an injury is mild and are unlikely to file a claim. As CEO of FOY, it is your task to report to the Board of Directors and shareholders at next week’s annual meeting and discuss what steps are being taken in response to this product defect. As you prepare for this meeting, you research and prepare to answer the following questions:
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