In the early days of a project, estimating costs can be difficult particularly if there is little or no historical data from previous projects of a similar nature. There are various tools and techniques that can help with this but there is no substitute for experience. As the project progresses, more information becomes available and the degree of uncertainty naturally falls.One basic assumption that needs to be made when estimating project costs is whether the estimates will be limited to direct project costs only or whether the estimates will also include indirect costs. Indirect costs are those costs that cannot be directly traced to a specific project and therefore will be accumulated and allocated equitably over mul¬tiple projects by some approved and documented accounting procedure.
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