= Solution
For a single <read-only memory> implementing both the next-state and output equations, the address has four request bits plus three present-state bits. Each word contains three next-state bits and four grant bits. Hence
$$
\boxed{2^7\text{ words}\times7\text{ bits}=128\times7=896\text{ bits}.}
$$
Three <D flip-flops> store the state outside this combinational ROM. This is the direct truth-table implementation for the encoding above. A smaller factored implementation exploits the independence of the next-state equations from $V$: a $64\times3$ next-state ROM and an $8\times4$ output ROM use $224$ stored bits in total, or the output decoder can be ordinary logic. These are different implementation organizations, not different state counts.
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