Hilfiger Industries Inc

Multiple Choice

Hilfiger Industries Inc.has developed a new forklift,model UH-40,that is designed to offer superior performance to a comparable forklift sold by Hilfiger's main competitor.The competing forklift sells for $96,000 and needs to be replaced after 1,000 hours of use.It also requires $9,000 of preventive maintenance during its useful life.Model UH-40's performance capabilities are similar to the competing product with two important exceptions-it needs to be replaced only after 2,000 hours of use and it requires $13,000 of preventive maintenance during its useful life. From a value-based pricing standpoint what is model UH-40's economic value to the customer over its 2,000 hour life?

A) $114,000
B) $197,000
C) $101,000
D) $192,000