McDermott Company developed a new industrial component called IC$-75$ that offers superior performance relative to the comparable

component sold by McDermott's primary competitor. The competing part sells for $$1,360$ and needs to be replaced after $2,160$ hours of

use. It also requires $$280$ of preventive maintenance during its useful life.

The IC$-75\text{'}$s performance capabilities are similar to its competing product with two important exceptions$-$it needs to be replaced after

$4,320$ hours of use and it requires $$380$ of preventive maintenance during its useful life.

Required:

From a value$-$based pricing standpoint:

What is the reference value McDermott should consider when pricing IC$-75?$

What is the differentiation value offered by IC$-75$ relative the competitor's offering for each $4,320$ hours of usage?

What is IC$-75\text{'}$s economic value to the customer over its $4,320-$hour life?

What range of possible prices should McDermott consider when setting a price for IC$-75?$