This only works for some projects. For example if your MVP or go/no go prototype costs $5MM (which a hardware or life science product easily could) you really need to know if it will be 5 or 10.
I ran a company which always quoted 3X fixed price what we thought the project would really cost, even if things turned out to go wrong. Typically we made the (promised) schedule, and when not (luckily didn’t happen too often) the customer would be able to tell pretty much as soon as we could tell, and together we dealt with it.
But as for the cost: most projects were extremely profitable but sometimes we would lose hundreds of thousands on them. That’s why we charged such a premium: we absorbed the financial risk (not that we ever told the customers our internal cost estimate — none of their business!)