Computation of economic value to customer over the 40000 hours useful life of Model QY-49 :
Economic value to the customer = Reference cost value + Differential cost value
Given that , cost of the alternative = $109000 and it's useful life is 10000 hrs.
For 40000 hrs. , we need four models of such type
Therefore, Reference cost value = cost of alternative × 4 =$109000×4 = $436000.
And also given that,
operating cost per hour for alternative model = $3.70 p. hr
operating cost per hour for QY-49 model = $2.10 p. hr
Differential cost per hour = $3.70 - $2.10 = $1.6 p. hr
Therefore , Differential cost for 40000 hrs = 40000hrs × $1.6 = $64000.
Hence,
ECONOMIC VALUE TO THE CUSTOMER
= $436000 + $64000
= $500000
_____×_____
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