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. $201,000 ? Value-based price ? $423,000
B. $423,000 ? Value-based price ? $552,000
C. $129,000 ? Value-based price ? $201,000
D. $129,000 ? Value-based price ? $552,000
Answer: D
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