Morice Industries Inc

question 88

Multiple Choice

Morice Industries Inc. has developed a new injection mold, model IA-05, that is designed to offer superior performance to a comparable injection mold sold by Morice's main competitor. The competing injection mold sells for $54,000 and needs to be replaced after 1,000 hours of use. It also requires $7,000 of preventive maintenance during its useful life. Model IA-05's performance capabilities are similar to the competing product with two important exceptions-it needs to be replaced only after 2,000 hours of use and it requires $8,000 of preventive maintenance during its useful life. From a value-based pricing standpoint what is model IA-05's economic value to the customer over its 2,000 hour life?

• A) $114,000
• B) $68,000
• C) $108,000
• D) $60,000

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Definitions:

Combatants

Individuals or groups actively engaged in a conflict, battle, or war, typically referring to soldiers or armed fighters.

War Zones

Regions or areas where armed conflicts are actively occurring, often characterized by violence, chaos, and destruction.

User Costs

The expenses associated with the use of a product or service, including maintenance, repair, and opportunity costs of capital tied up in ownership.

Nonrenewable Resource

A natural resource that cannot be replenished or takes millions of years to form again, such as coal, oil, and natural gas.