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No, that's for creating an output file to do simulations in a 3rd party tool. In the Assignments -> Settings box, along the left side where you see things like Files and EDA Tool Settings, there should be one called Simulator Settings, and you add the file there.
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This doesn't work for my version Modelsim version 6.5b (has to use this version to simulate legacy AHDL code).
I have several screen dump files in PNG-format that illustrates the issue, however this site doesn't accept png-format files. :(
Hope to hear from you soon.