Cables Electronics Corporation Has Developed a New Instrument-Model XG-75-That Has

question 375

Multiple Choice

Cables Electronics Corporation has developed a new instrument-model XG-75-that has been designed to outperform a competitor's best-selling instrument. Model XG-75 has a useful life of 46,000 hours of service and its operating cost is $2.80 per hour. In contrast, the competitor's product has a useful life of 23,000 hours of service and has operating costs that average $5.40 per hour. The competitor's instrument sells for $160,000. Cables has not yet established a selling price for model XG-75. From a value-based pricing standpoint what is the reference value that Cables should consider when pricing model XG-75?

• A) $284,200
• B) $279,600
• C) $344,000
• D) $160,000

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Definitions:

Significant Points

Key or important aspects, facts, or features that are noteworthy.

Higher Price

The strategy of setting the cost of a product or service above the average market price to signal higher quality or to cover higher production costs.

Market Segments

Market segments consist of individuals or entities grouped together based on shared traits or needs, which lead them to desire comparable products and services, reflecting similar preferences, attributes, or actions.

Broad Array

A wide range or selection of items or options available within a category or across different categories.