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

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

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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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 eamed during the next six years. TABLE 21 Age of Machine at Beginning of Year 0 Vear 1Year 2 Years Revenues (5) 4,500 3,000 1500 Operating Costs (S) 500 700 1,100 Salvage Value at End of Year (5) | 3,000 1,800 500
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 $5,000. The revenues earned by a machine, the cost of maintaining it, and the salvage value that can be obtained by selling it at the end of a year depend on the age of the machine (see Table 21). Use dynamic programming to maximize the net profit earned during the next six years. TABLE 21 Age of Machine at Beginning of Year O Vear 1 Year 2 Years Revenues (S) 4,500 3,000 1,500 Operating Costs ($) 500 700 1,100 Salvage Value at End of Year (S) 3,000 1,800 500
Transcribed Image Text: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 $5,000. The revenues earned by a machine, the cost of maintaining it, and the salvage value that can be obtained by selling it at the end of a year depend on the age of the machine (see Table 21). Use dynamic programming to maximize the net profit earned during the next six years. TABLE 21 Age of Machine at Beginning of Year O Vear 1 Year 2 Years Revenues (S) 4,500 3,000 1,500 Operating Costs ($) 500 700 1,100 Salvage Value at End of Year (S) 3,000 1,800 500
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