Multiple Choice
Olivier Industries Inc.has developed a new instrument,model AG-06,that is designed to offer superior performance to a comparable instrument sold by Olivier's main competitor.The competing instrument sells for $74,000 and needs to be replaced after 1,000 hours of use.It also requires $7,000 of preventive maintenance during its useful life.Model AG-06's performance capabilities are similar to the competing product with two important exceptions-it needs to be replaced only after 4,000 hours of use and it requires $14,000 of preventive maintenance during its useful life. From a value-based pricing standpoint what is the differentiation value offered by model AG-06 relative to the competitor's offering for each 4,000 hours of usage?
A) $296,000
B) $102,000
C) $236,000
D) $14,000
Correct Answer:
Verified
Correct Answer:
Verified
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