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One of the major design issues in heterogeneous wireless networks is the support of vertical handoff. Vertical handoff occurs when a mobile terminal switches from one network to another (e.g., from WLAN to CDMA 1timesRTT). The objective of this paper is to determine the conditions under which vertical handoff should be performed. The problem is formulated as a Markov decision process. A link reward function and a signaling cost function are introduced to capture the tradeoff between the network resources utilized by the connection and the signaling and processing load incurred on the network. A stationary deterministic policy is obtained when the connection termination time is geometrically distributed. Numerical results show good performance of our proposed scheme over two other vertical handoff decision algorithms, namely: SAW (simple additive weighting) and GRA (grey relational analysis).