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ABC Inc. is evaluating a packaging machine, sold by Modern Machines Inc. (MM), for its manufacturing plant. The price of the next best alternative is

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ABC Inc. is evaluating a packaging machine, sold by Modern Machines Inc. (MM), for its manufacturing plant. The price of the next best alternative is $650,000. After considering factors such as its lower maintenance and downtime costs, the performance differential for MM's machine (compared to the next best alternative) is $80,000 ABC Inc.'s buying center believes the performance differential for MM's machine is $60,000. The cost of goods sold for MM's machine is $225,000 Answer the following questions (please label your answers A, B, C, and D). A-D are each worth 6.25 points. A. What is the maximum price that a fully informed buyer would be willing to pay for the machine? B. What is the maximum price that the buyer, ABC Inc., would be willing to pay for the machine? C. What is the lower limit of the feasible price range for the machine? D. What can MM do to maximize the price that ABC Inc. is willing to pay for the machine? Use value-pricing thermometer terminology to frame your

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