A study was conducted on the labor-hour costs of Federal Deposit Insurance Corporation (FDIC) audits of banks. Data were obtained on 91 such audits. Some of these were conducted by the FDIC alone and some jointly with state auditors. Auditors rated banks' management as good, satisfactory, fair, or unsatisfactory. The model estimated was
y = FDIC auditor labor-hours
x1 = total assets of bank
x2 = total number of offices in bank
x3 = ratio of classified loans to total loans for bank
x4 = 1 if management rating was "good," 0 otherwise
x5 = 1 if management rating was "fair," 0 otherwise
x6 = 1 if management rating was "unsatisfactory," 0 otherwise
x7 = 1 if audit was conducted jointly with the state,
0 otherwise The numbers in parentheses beneath coefficient estimates are the associated standard errors. Write a report on these results.

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