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?

Question

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?

Quizplus · Accepted Answer

The formula that should go in cell G5 to calculate the 80th percentile of the empirical distribution of income is the PsiPercentile function, which is already provided in option D. This function calculates the kth percentile of the given data set, where k is a decimal number between 0 and 1. Therefore, to calculate the 80th percentile, we should use the value 0.8 as the second argument in the PsiPercentile function.

The Owner of Fix-A-Dent Auto Repair Wants to Study the Growth