6 A company needs to have a working machine during each of the next six years. Currently, it has a new machine.

At the beginning of each year, the company may keep the machine or sell it and buy a new one. A machine cannot be kept for more than three years. A new machine costs $5,000.

The revenues earned by a machine, the cost of maintaining it, and the salvage value that can be obtained by selling it at the end of a year depend on the age of the machine (see Table 21). Use dynamic programming to maximize the net profit earned during the next six years.

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TABLE 21 Age of Machine at Beginning of Year 0 Year 1 Year 2 Years Revenues ($) 4,500 3,000 1,500 Operating Costs ($) 500 700 1,100 Salvage Value at End of Year ($) 3,000 1,800 500