Shoun Mechanical Corporation Has Developed a New Industrial Grinder-Model QJ-47-That

Multiple Choice

Shoun Mechanical Corporation has developed a new industrial grinder-model QJ-47-that has been designed to outperform a competitor's best-selling industrial grinder. Model QJ-47 has a useful life of 120,000 hours of service and its operating cost is $0.60 per hour. In contrast, the competitor's product has a useful life of 30,000 hours of service and has operating costs that average $0.90 per hour. The competitor's industrial grinder sells for $129,000. Shoun has not yet established a selling price for model QJ-47.
-From a value-based pricing standpoint what range of possible prices should Shoun consider when setting a price for QJ-47?

A) $423,000 ≤ Value-based price ≤ $552,000
B) $129,000 ≤ Value-based price ≤ $201,000
C) $129,000 ≤ Value-based price ≤ $552,000
D) $201,000 ≤ Value-based price ≤ $423,000