Napp Heavy Machinery Corporation Has Developed a New Drill Press-Model

Multiple Choice

Napp Heavy Machinery Corporation has developed a new drill press-model GJ-37-that has been designed to outperform a competitor's best-selling drill press. The competitor's product has a useful life of 30,000 hours of service, has operating costs that average $1.70 per hour, and sells for $169,000. In contrast, model GJ-37 has a useful life of 120,000 hours of service and its operating cost is $1.10 per hour. Napp has not yet established a selling price for model GJ-37. From a value-based pricing standpoint what range of possible prices should Napp consider when setting a price for GJ-37?

A) $579,000 ≤ Value-based price ≤ $748,000
B) $169,000 ≤ Value-based price ≤ $748,000
C) $301,000 ≤ Value-based price ≤ $579,000
D) $169,000 ≤ Value-based price ≤ $301,000