Rapson Pure Water Solutions Corporation has developed a new water purification system-model EN-78-that has been designed to outperform a competitor's best-selling water purification system. Model EN-78 has a useful life of 120,000 hours of service and its operating cost is $0.70 per hour. In contrast, the competitor's product has a useful life of 40,000 hours of service and has operating costs that average $1.20 per hour. The competitor's water purification system sells for $149,000. Rapson has not yet established a selling price for model EN-78.From a value-based pricing standpoint what range of possible prices should Rapson consider when setting a price for EN-78?
A. $149,000 ? Value-based price ? $233,000
B. $149,000 ? Value-based price ? $507,000
C. $358,000 ? Value-based price ? $507,000
D. $233,000 ? Value-based price ? $358,000
Answer: B
Business
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