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Formulate the following problem as a Dynamic Programming problem and solve it using a multi-

stage optimization strategy. (Note: No credits will be given for solving it using any other means)new

A company needs to have a working machine during neach of the next six years. Currently it has a new machine. At the beginnig nf each year, the company may keep the machine or sell it and buy a new one, but a machine cannot be kept for more than three years. A ne machine costs $5000. The revenues earned by a machine, the cost of maintaining it, and the salvage value that can be obtained by selling at the end of a year depend on the age of the machine (given in the Table below). Use dynamic programming to maxime the net profit earned during next six years.

Age of machine at beginning of year 0 year 1 year 2 years Revenues ($) 4,500 3000 1500 Operating costs ($) 500 700 1100 Salvage value at end of year ($) 3000 1800 500