Hennig Plastics Equipment Corporation Has Developed a New Injection Mold-Model

Multiple Choice

Hennig Plastics Equipment Corporation has developed a new injection mold-model XP-30-that has been designed to outperform a competitor's best-selling injection mold. Model XP-30 has a useful life of 70,000 hours of service and its operating cost is $0.80 per hour. In contrast, the competitor's product has a useful life of 35,000 hours of service and has operating costs that average $1.10 per hour. The competitor's injection mold sells for $151,000. Hennig has not yet established a selling price for model XP-30. From a value-based pricing standpoint what is XP-30's economic value to the customer over its 70,000 hour useful life?

A) $200,000
B) $189,500
C) $172,000
D) $323,000