Project Cost Calculation

If the total project cost cannot exceed €200,000 and indirect costs must be 25% of the direct costs, you need to calculate the allowable direct costs and then add 25% for indirect costs.

Let be the direct costs. The indirect cost will be . The total cost equation is:

x + 0.25x = 200,000

Solving for :

1.25x = 200,000 \\

x = \frac{200,000}{1.25} \\

x = 160,000

So, the allowable direct cost is €160,000, and the indirect cost will be:

0.25 \times 160,000 = 40,000

Total project cost: €160,000 (direct) + €40,000 (indirect) = €200,000.

Thus, the project can allocate €160,000 for direct costs and €40,000 for indirect costs.