QUESTION 7 (25 Marks) A company is investigating methods of quickly estimating the approximate cost of building new dwellings. Major cost drivers are seen as floor area and the number of kitchens and bathrooms. They are investigating the use of the following formula. Y=A+BF+ CK Where Y is the estimated cost, F is the floor area in m and, K is the number of kitchens and bathrooms. They have obtained the following information for a number of completed dwellings. (a) Carry out a regression analysis to find the equation for the least squares best for these results. (15 Marks) (b) Illustrate your answer with a scatter diagram comparing the actual costs with the least squares best fit results. (10 Marks) F Floor Area in m K Number of kitchens and Y Actual cost bathrooms in thousands of dollars 740 3 820 430 2 560 1300 5 1,300 850 3 603 700 2 769 1200 3 1,167 400 2 540 850 3 601 560 2 664 1500 6 1,455 1250 4 1,227 950 3 975 560 2 665 950 3 980 750 3 825 850 4 923 840 3 890 495 3 635 850 3 905 780 4 870