enues rixed! How do you know 17. Consider the computer output in Table 12.5.12,

Question

enues rixed! How do you know 17. Consider the computer output in Table 12.5.12, part of an analysis to explain the final cost of a project based on management's best guess of labor and materials costs at the time the bid was placed, computed from 25 recent contracts. All variables are measured in dollars. a. What percentage of the variation in cost is explained by the information available at the time the bid b. Approximately how closely can we predict cost if c. Find the predicted cost of a project involving $9000 d. Is the F test significant? What does this tell you? is placed? we know the other variables? in labor and $20,000 in materials Do materials have a significant impact on cost? e.

Explanation / Answer

b) We have r^2 = 79.7 % , so we can 79.7% closely the cost if we know other varaibles .

c) we have regression equation as cost = 13.975 + 1.18*Labor +1.64*Material.

We have to predict cost for Labor = 9000 and Marital = 20000

So cost = 13.975 + 1.18*9000 +1.64*20000 =57395

d) From F test , p = 0.000 , which is less than significance level 0.05

So F test is not significant

e) p value corrsponding to Marital is 0.000 , which is less than significant level = 0.05

So there is impact of maritals on cost .

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