This diagram corresponds to Fig. 11.5 except that all three possible states at stage 3 are shown. Thus, if x2 0, the resulting state at stage 3 will be s2 x2 2 0 2, whereas x2 1 leads to state 1 and x2 2 leads to state 0. The corresponding values of p2(x2) from the country 2 column of Table 11.1 are shown along the links, and the values of f3 *(s2 x2) from the n 3 table are given next to the stage 3 nodes. The required calculations for this case of s2 2 are summarized below. Formula: f2(2, x2) p2(x2) f3 *(2 x2). p2(x2) is given in the country 2 column of Table 11.1. f3 *(2 x2) is given in the n 3 table (bottom of preceding page). x2 0: f2(2, 0) p2(0) f3 *(2) 0 70 70. x2 1: f2(2, 1) p2(1) f3 *(1) 20 50 70. x2 2: f2(2, 2) p2(2) f3 *(0) 45 0 45. Because the objective is maximization, x2 * 0 or 1 with f2 *(2) 70. Proceeding in a similar way with the other possible values of s2 (try it) yields the fol