Morice Industries Inc

Multiple Choice

Morice Industries Inc. has developed a new injection mold, model IA-05, that is designed to offer superior performance to a comparable injection mold sold by Morice's main competitor. The competing injection mold sells for $54,000 and needs to be replaced after 1,000 hours of use. It also requires $7,000 of preventive maintenance during its useful life. Model IA-05'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 $8,000 of preventive maintenance during its useful life.
-From a value-based pricing standpoint what is model IA-05's economic value to the customer over its 2,000 hour life?

A) $114,000
B) $68,000
C) $108,000
D) $60,000