Question: Consider the supercomputer example from Exercise 5 . 2 0 . The firm is not sure about some of the relevant costs. The following probability

Consider the supercomputer example from Exercise 5.20. The firm is not sure about some of the relevant costs. The following probability distributions reflect their beliefs about the uncertain costs: the annual operating and maintenance costs are uniformly distributed on the range [$150,000, $250,000]; the additional operating costs for simulation runs above 15,000 per year are uniformly distributed on the range [$500, $1500](per run per year). Use the method of moments to estimate the mean and variance of the costs if the firm purchases the supercomputer and they perform 20,000 runs per year. Use Monte Carlo sampling to estimate the distribution of costs if the firm purchases the supercomputer and they perform 20,000 runs per year. Calculate the Mean, 5th percentile, and 95th percentile of the distribution. (Hint: Use the Excel function RandBetween(Bottom,Top) to simulate a uniform distribution)

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