Rapson Pure Water Solutions Corporation has developed a new water purification systemmodel EN-78that has been designed to outperform a competitors 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 competitors product has a useful life of 40,000 hours of service and has operating costs that average $1.20 per hour. The competitors 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?

Multiple Choice

• $233,000 Value-based price $358,000

• $358,000 Value-based price $507,000

• $149,000 Value-based price $507,000

• $149,000 Value-based price $233,000