4. Consider the equipment replacement problem over a period of it years. A new piece of equipment costs c dollars, and its resale value after t years in operation is s(t) = n - t for n > l and zero otherwise. The annual revenue is a function of the age t and is given bv ret) = n2 - (2 for n > l and zero otherwise. .

(a) Formulate the problem as a DP model.

(b) Find the optimal replacement policy given that c = $10,000, n = 5, and the equipment is 2 years old.