High School

Stella is frustrated with her sewing machine, which frequently breaks down. The threading mechanism is time-consuming to fix and sometimes causes tears in the fabric, forcing her to start over. Her mother originally purchased the current machine for $575 many years ago. A local repair shop says it can be maintained for $125 per year, which will allow it to be used heavily for three more years.

A replacement sewing machine would increase efficiency, enabling Stella to produce an additional 3 swimsuits per hour. A new industrial sewing machine costs $1,400, and Stella is uncertain about how she would depreciate it. If she opens the store, she will need two sewing machines.

What should Stella do regarding her sewing machine situation? Consider the costs and benefits of maintaining the current machine versus purchasing a new one.

Answer :

The best option for Stella will depend on her budget and her needs. If she can afford it, buying two new industrial sewing machines would be the most efficient option.

How to solve

Stella can replace her sewing machines by either repairing her current machine for $125 per year for three more years, or buying two new industrial sewing machines for $1,400 each.

The depreciation of a sewing machine is typically 15% per year, so a new industrial sewing machine would depreciate by $210 per year.

Here are the two options in more detail:

Repair the current machine: This option would cost $125 per year for three years, for a total of $375. The machine would then be worth $0 after three years.

Buy two new industrial sewing machines: This option would cost $2,800 upfront. The machines would depreciate by $210 per year, for a total depreciation of $420 per year.

The best option for Stella will depend on her budget and her needs. If she can afford it, buying two new industrial sewing machines would be the most efficient option.

However, if she is on a tight budget, repairing her current machine may be the best option.

Here is a table summarizing the two options:

Option Cost Depreciation

Repair the current machine $375 $0

Buy two new industrial sewing machines $2,800 $420

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The Complete Question

Stella is tired of her sewing machine continually breaking down. The threading mechanism takes her significant time to fix every time and sometimes causes tears in the fabric so she has to start over. The current machine cost her mother $575 many years ago. A local repair shops says the machine can be maintained for $125 per year, which will allow it to be used heavily for three more years. A replacement sewing machine will make things more efficient and Stella will be able to make an additional 3 swimsuits per hour. A new industrial sewing machine costs $1,400 and Stella is unsure of how she would depreciate it. If she opens the store, she will need two sewing

How can she replace the sewing machines?

What is the sewing machine depreciation?

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