McDermott Company has developed a new industrial component called IC-75. The company is excited about IC-75 because it offers superior performance relative to the comparable component sold by McDermott's primary competitor. The competing part sells for $1,380 and needs to be replaced after 2,180 hours of use. It also requires $290 of preventive maintenance during its useful life The IC-75's performance capabilities are similar to its competing product with two important exceptions-it needs to be replaced after 4,360 hours of use and it requires $390 of preventive maintenance during its useful life Required: From a value-based pricing standpoint 1. What is the reference value that McDermott should consider when pricing IC-75? 2. What is the differentiation value offered by IC-75 relative the competitor's offering for each 4,360 hours of usage? 3. What is IC-75's economic value to the customer over its 4,360-hour life? 4. What range of possible prices should McDermott consider when setting a price for IC-75? Answer is not complete. 1. 2 Roforonco value Differentiation value Economic value to the customer Range of possible prices $ 1,380 $ 2,370 $ 3,750 3 4 Value-based price