Question: 6. Develop a sound regression model to estimate and predict the winning bid (Price) on the final contract for the year, which has the following

6. Develop a sound regression model to estimate and predict the

6. Develop a sound regression model to estimate and predict the winning bid (Price) on the final contract for the year, which has the following characteristics: The estimated cost is $1,000,000, of which $700,000 is due to fixed costs, and the four contractors interested in the project are expected not to rig the auction. (a) Write down the estimated regression equation and explain how you came to choose it. (b) Give a point estimate for the winning bid and provide an interval that will contain the winning bid with 90 percent confidence. (c) How confident are you that in this project the winning bid will come in under budget (so that Johnson will earn his bonus)

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