Conaghan Avionics Corporation Has Developed a New High Pressure Pump-Model

question 244

Multiple Choice

Conaghan Avionics Corporation has developed a new high pressure pump-model RA-79-that has been designed to outperform a competitor's best-selling high pressure pump. The competitor's product has a useful life of 30,000 hours of service, has operating costs that average $3.60 per hour, and sells for $159,000. In contrast, model RA-79 has a useful life of 60,000 hours of service and its operating cost is $2.00 per hour. Conaghan has not yet established a selling price for model RA-79. From a value-based pricing standpoint what is RA-79's economic value to the customer over its 60,000 hour useful life?

• A) $414,000
• B) $267,000
• C) $255,000
• D) $279,000

---

Definitions:

Depolarizes

The process by which the electrical charge of a cell's membrane is reduced, leading to the possibility of generating an action potential.

Left Atrial Pressure

The pressure within the left atrium of the heart, important in evaluating heart function, particularly in conditions affecting left ventricular filling.

Left Ventricular Pressure

The pressure within the left ventricle of the heart, critical in assessing heart function and particularly significant during systole and diastole phases.

Bicuspid Valve

Valve closing the orifice between left atrium and left ventricle of the heart; also called mitral valve.