Although natural gas is currently inexpensive and nuclear power currently (and perhaps deservedly) does not have a good reputation, it is possible that more nuclear power plants will be constructed in the future. Table 4 presents data concerning the construction costs of light water reactor (LWR) nuclear power plants. The dependent variable, C, construction cost, is expressed in millions of dollars, adjusted to a 1976 base. Preliminary analysis of the data and economic theory indicates that variation in cost increases as cost increases. This suggests transforming cost by taking its natural logarithm.

S Power plant capacity in MWe

N Cumulative number of power plants built by the contractor

1. Build a multiple regression model to predict ln(C) by taking S and N or their natural logarithms as the independent variables. Make sure to check for multicollinearity.
2. Use residual analysis and R2 to check your model.
3. State which variables are important in predicting the cost of constructing an LWR plant, and
4. State a prediction equation that can be used to predict ln(C).

Table 4

Data Concerning Construction of Light Water Reactors

Plant	C	S	N
1	460.05	687	14
2	452.99	1,065	1
3	443.22	1,065	1
4	652.32	1,065	12
5	642.23	1,065	12
6	345.39	514	3
7	272.37	822	5
8	317.21	457	1
9	457.12	822	5
10	690.19	792	2
11	350.63	560	3
12	402.59	790	6
13	412.18	530	2
14	495.58	1,050	7
15	394.36	850	16
16	423.32	778	3
17	712.27	845	17
18	289.66	530	2
19	881.24	1,090	1
20	490.88	1,050	8
21	567.79	913	15
22	665.99	828	20
23	621.45	786	18
24	608.8	821	3
25	473.64	538	19
26	697.14	1,130	21
27	207.51	745	8
28	288.48	821	7
29	284.88	886	11
30	280.36	886	11
31	217.38	745	8
32	270.71	886	11

Please provide some in-depth explanations answering these questions.

Thanks again!