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The existence of external benefit and external cost leads to misallocation of resources. External cost For example, when drivers are not liable for the health damage of car exhaust, drivers will equate only marginal private cost with marginal benefit. But if drivers are forced to pay for the health damage of car exhaust, their marginal cost will go up by the amount of the external cost.
Indirect costs include overhead and other operational expenses that have nothing to do with the project. Examples of these operational expenses are: Office rent (if the office is not used solely to develop the project), electricity, legal fees (non project specific), and other administrative costs.