1 A farmer owns a 2-year-old tractor and wants to develop a replacement policy for it over the next five years. A tractor must be kept in service for at least 2 years, but must be disposed of after 5 years. The current purchase price of a tractor is 1.0 million rupees and increases by 10% a year. The salyage value of a 2-year-old tractor is 0.8 million rupees and decreases by 10% every year. The current annual operating cost of the tractor is Rs: 24,000 but is expected to increase by 10% a year. Determine the optimal replacement policy of the tractor over the next five years and cost the framer has to bear