Tavis Robotics Corporation Has Developed a New Robot-Model FI-73-That Has

question 58

Multiple Choice

Tavis Robotics Corporation has developed a new robot-model FI-73-that has been designed to outperform a competitor's best-selling robot. The competitor's product has a useful life of 10,000 hours of service, has operating costs that average $4.60 per hour, and sells for $109,000. In contrast, model FI-73 has a useful life of 30,000 hours of service and its operating cost is $2.60 per hour. Tavis has not yet established a selling price for model FI-73.
-From a value-based pricing standpoint what is FI-73's economic value to the customer over its 30,000 hour useful life?

• A) $155,000
• B) $278,000
• C) $387,000
• D) $187,000