Question
Schimpf Industries Inc. has developed a new grinder, model WC-13, that is designed to offer superior performance to a comparable grinder sold by Schimpfs main
Schimpf Industries Inc. has developed a new grinder, model WC-13, that is designed to offer superior performance to a comparable grinder sold by Schimpfs main competitor. The competing grinder sells for $70,000 and needs to be replaced after 4,100 hours of use. It also requires $8,200 of preventive maintenance during its useful life. Model WC-13s performance capabilities are similar to the competing product with two important exceptionsit needs to be replaced only after 16,400 hours of use and it requires $20,500 of preventive maintenance during its useful life.
From a value-based pricing standpoint what range of possible prices should Schimpf consider when setting a price for model WC-13?
Multiple Choice
$70,000 Value-based price $292,300
$222,300 Value-based price $280,000
$70,000 Value-based price $280,000
$222,300 Value-based price $292,300
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