Essay
Kingsford Pure Water Solutions Corporation has developed a new water purification system-model PC-97-that has been designed to outperform a competitor's best-selling water purification system. Model PC-97 has a useful life of 100,000 hours of service and its operating cost is $0.70 per hour. In contrast, the competitor's product has a useful life of 20,000 hours of service and operating costs that average $1.00 per hour. The competitor's water purification system sells for $149,000. Kingsford has not yet established a selling price for model PC-97.
Required:
From a value-based pricing standpoint what range of possible prices should Kingsford consider when setting a price for model PC-97?
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