Exhibit 12.5 The Following Questions Use the Information Below

question 49

True/False

Exhibit 12.5
The following questions use the information below.
The owner of Sal's Italian Restaurant wants to study the growth of his business using simulation. He is interested in simulating the number of customers and the amount ordered by customers each month. He currently serves 1000 customers per month and feels this can vary uniformly between a decrease of as much as 5% and an increase of up to 9%. The bill for each customer is a normally distributed random variable with a mean of $20 and a standard deviation of $5. The average order has been increasing steadily over the years and the owner expects the mean order will increase by 2% per month. You have created the following spreadsheet to simulate the problem.
-An arrival process is memoryless if the time until the next arrival occurs is inversely proportional to the time elapsed since the last arrival.

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Definitions:

Micro Political Risk

Micro political risk involves the impact of political decisions, events, or conditions on an individual firm's operations and performance, as opposed to the broader industry or economic segment.

Macro Political Risk

Adverse political actions that affect all foreign investments and operations in a host country.

Reputational Risk

The potential for loss resulting from damages to a firm's reputation, which can affect its business operations and financial performance.

Valuation Risk

The risk of loss associated with inaccuracies or variations in the valuation of assets, liabilities, or financial instruments.