Exhibit 12.1 The Following Questions Use the Information Below

question 35

Multiple Choice

Exhibit 12.1
The following questions use the information below.
The owner of Fix-a-dent Auto Repair wants to study the growth of his business using simulation. He is interested in simulating the number of damaged cars and the amount of damage to the cars each month. He currently repairs 100 cars per month and feels this can vary uniformly between a decrease of as much as 3% and an increase of up to 5% (average change of 1%) over the previous months. The dollar value of the damage to the cars is a normally distributed random variable with a mean of $3,000 and a standard deviation of $500. The average repair bill has been increasing steadily over the years and the owner expects the mean repair bill will increase by 1% per month. You have created the following spreadsheet to simulate the problem.
-Using the information in Exhibit 12.1, what formula should go cell G5 to calculate the 80^th percentile of the empirical distribution of income?

• A) =IF(RANK(D21) = 80, 1, 0)
• B) None, use Excel Histogram on cell D21.
• C) =IF(COUNTIF(D8:D19 > D21) ≥ 8, 1, 0)
• D) =PsiPercentile(B21, .8).

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Definitions:

Pyroclastic Flow

A fast-moving current of hot gas and volcanic materials that flows down the sides of a volcano during an explosive eruption.

Eruption Column

A column of gases, ash, and volcanic rock emitted into the atmosphere during a volcanic eruption, which can affect climate and aviation.

Pyroclastic Flow

A rapid stream of heated gas and volcanic substances flowing down a volcano's slopes amid an explosive eruption.

Tephra

A pyroclastic material, regardless of size or origin, ejected during an explosive volcanic eruption; includes ash, pumice, and rock fragments.