Question:

In a random sample of eight military contracts involving cost overruns, the following information was obtained. x = big price of the contract (in millions of dollars) and y = cost of overrun (expressed as a percent of the bid price).

1. Draw the scatter diagram for this data.
2. Find the slope, b, and the intercept, a, for the least-squares line. Write the equation of the least-squares line.

   	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
   Intercept	42.99013	0.888167	48.40321	5.21E-09	40.81686	45.1634
   x	-1.68092	0.070436	-23.8644	3.56E-07	-1.85327	-1.50857

   
   This means that the least squares equation is given by:
   \[y=42.99-1.681x\]
3. Graph the least-squares line on your scatter diagram.

d) If an overrun contract was bid at 12 million dollars, what does the least-squares line predict for the cost of overrun (as a percent of bid price)?

Price: $2.99

Solution: The downloadable solution consists of 3 pages
Deliverable: Word Document