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Chapter 7: Determining Costs, Budget, and Earned Value
CHAPTER 7: DETERMINING COSTS, BUDGET, AND EARNED VALUE ..............1

Chapter Concepts ................................................................................................................................ 2
Learning Outcomes .............................................................................................................................. 2
Project Management Knowledge Areas from PMBOK® Guide ........................................................... 3
Teaching Strategies ............................................................................................................................. 3
Lecture Notes ....................................................................................................................................... 3
1. Real-World Project Management Examples ................................................................................ 3
Vignette A: Managing Costs of Tidal Feasibility ............................................................................ 3
Vignette B: What Comes First, Schedule Delay or Cost Overrun? ............................................... 4
2. Estimate Activity Costs ................................................................................................................. 4
3. Determine Project Budget ............................................................................................................ 5
A. Aggregate Total Budgeted Cost ............................................................................................... 5
B. Develop Cumulative Budgeted Cost ......................................................................................... 5
4. Determine Actual Cost .................................................................................................................. 6
A. Actual Cost ............................................................................................................................... 6
B. Committed Costs ...................................................................................................................... 6
C. Compare Actual Cost To Budgeted Cost ................................................................................. 6
5. Determine Value of Work Performed ........................................................................................... 6
6. Analyze Cost Performance ........................................................................................................... 7
A. Cost Performance Index ........................................................................................................... 7
B. Cost Variance ........................................................................................................................... 8
7. Estimate Cost at Completion ........................................................................................................ 8
8. Control Costs ................................................................................................................................ 9
9. Manage Cash Flow ....................................................................................................................... 9
10. Cost Estimating for Information Systems Development ........................................................... 10
An IS Example: Internet Applications Development for ABC Office Designs (Continued) ............. 10
11. Project Management Information Systems............................................................................... 11
12. Critical Success Factors ........................................................................................................... 11
13. Summary .................................................................................................................................. 12
Questions........................................................................................................................................ 12
Internet Exercises ........................................................................................................................... 15
Case Study #1 A Not-For-Profit Medical Research Center ............................................................ 16
Answers to Case Questions ........................................................................................................ 16
Group Activity .............................................................................................................................. 16
Case Study #2 The Wedding .......................................................................................................... 16
Answers to Case Questions ........................................................................................................ 16
Group Activity .............................................................................................................................. 17
Optional Supplemental Activities .................................................................................................... 17
Appendix #1 - Time–Cost Trade-Off .................................................................................................. 17
Questions........................................................................................................................................ 18
Appendix #2 - Microsoft Project ......................................................................................................... 18
© 2018 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
1
CHAPTER 7: DETERMINING COSTS, BUDGET, AND EARNED VALUE
Chapter Concepts
In addition to establishing a baseline schedule for a project, it is also necessary to develop a
baseline budget. Estimates must be made of the costs for each specific activity. The project budget
is determined by aggregating the estimated costs for all the activities. The budget must then be
spread over the expected time span of the project to create a time-phased baseline budget that is
used to analyze cost performance of the project. Once the project starts, it is important to monitor
actual costs and earned value of the work performed. At regular intervals during the project, the
following cost-related parameters should be monitored:
• Cumulative actual amount spent since the start of the project
• Cumulative earned value of the work performed since the start of the project
• Cumulative budgeted amount planned to be spent, based on the project schedule, from
the start of the project.
Comparisons must be made among these three parameters to evaluate whether the project is being
accomplished within budget and whether the earned value of the work performed is in line with the
actual cost expended.
If at any time during the project it is determined that the project is overrunning the budget or the
value of the work performed is not keeping up with the actual cost expended, corrective action must
be taken immediately. Once project costs get out of control, it will be very difficult to complete the
project within budget. As you will see in this chapter, the key to effective cost control is to analyze
cost performance on a timely and regular basis. Early identification of cost variances allows
corrective action to be taken before the situation gets worse. Based on the actual cost expended and
the earned value of the work performed, you will learn how to regularly forecast whether the entire
project will be completed within budget.
Based upon this chapter, students will become familiar with

• Estimating the costs of activities
• Determining a time-phased baseline budget
• Determining the earned value of the work performed
• Analyzing cost performance
• Forecasting project cost at completion
• Controlling project costs
• Managing cash flow
Learning Outcomes
After studying this chapter, the learner should be able to:
• Estimate the cost of activities
• Aggregate the total budgeted cost
• Develop a time-phased baseline budget
• Describe how to accumulate actual costs
• Determine the earned value of work performed
• Calculate and analyze key project performance measures
• Discuss and apply approaches to control the project budget
• Explain the importance of managing cash flow
2
Project Management Knowledge Areas from PMBOK® Guide

Concepts in this chapter support the following Project Management Knowledge Areas of the PMI
Guide to the Project Management Body of Knowledge (PMBOK® Guide):
Project Cost Management
Teaching Strategies
1. The two vignettes reinforce the requirement to use lessons learned to inform the
next project, increase consideration of risk management, have change control
strategies, set appropriate responsibilities, have a communication plan, have
procedures for addressing common issues, organize project sites, and align
stakeholders. The goal is to detect and curb systematic cost underestimation and
manage scope changes to avoid cost and schedule overruns. The first vignette
explores a tidal project that incorporated lessons learned from a demonstration
project and listened to key stakeholders to build trust. The second vignette
reinforces the need to examine the relationships among scheduling, costs, benefits,
and earned value in order to have successful projects.
2. Tell students a story of a project that has spent all its money but hasn't finished all
the tasks. Have students determine what could have been done to avoid the
situation, remedy the situation, or absorb the cost overruns.
3. Have students use a work breakdown structure and network diagram for a project
they will have to complete during the class semester to develop the costs. Have the
students estimate the earned value at different time periods of the project given a
scenario on how far along they have completed their projects.
4. Have students simulate actual completion dates for the consumer market study in
Microsoft Project to see how they accumulated actual costs and earned value
change over time.
Lecture Notes
1. Real-World Project Management Examples

Vignette A: Managing Costs of Tidal Feasibility
Projects that have new proof of concept are deemed to be higher risk than projects with proven
processes. Within the project plan for these proof of concept projects are feasibility studies and
budget investments for the research and development. If the proof of concept project is deemed
feasible, then the larger project is developed with its full budget. If it is not feasible, then the next
concept is tested or the project is terminated. These decisions are based on the finances for the
support of the research and development and on a comparison between the budget for actual
costs of project investment and potential benefits.
• Renewable energy projects have experienced increasing investment even though the
prices of oil and gas have declined.
o The types of investments have included projects related solar power, wind
power, hydroelectric, waste-to-energy, and biofuels.
o One source of renewable energy that has captured much new investment has
been energy from the oceans’ tides.
o From a project planning and budgeting standpoint, the ocean’s tides are
relatively consistent whereas the amount of sun or wind for solar and wind
energy projects is variable and, at times, unpredictable.
• Tidal Project
o Include funds for newer technologies, testing in harsh and complicated
environmental conditions, and testing for strength, performance, and durability
of the materials to be used for turbines and their support structures.
3
o Smaller demonstration projects related to tidal stream and tidal barrage

technologies have been successful.
o Dam-like structures impact a number of environmental aspects such as water
quality, fish migration, and noise pollution.
o Benefits of the project included a reduction of debris in the bay, reduced carbon
emissions, and increases in employment.
• Other projects
o Scotland
o China
o Netherlands
Vignette B: What Comes First, Schedule Delay or Cost Overrun?
Schedule delays have occurred in many projects that have experienced cost overruns. There
are many projects that have had cost overruns that also have had schedule overruns. One could
think that if a project had a cost overrun, it must have had a schedule overrun, or, the other
order, if a project had a schedule overrun then it must have had a cost overrun.
• Researchers from several institutions examined data from years of complex projects,
their schedules, their costs, and other factors such as unrealistic estimates, supply chain
failures, scope changes, scheduling practices and margins, risk events, and project
manager experience.
• Do schedule delays cause cost overruns? Do cost overruns cause schedule delays? Are
they only related and not causing each other?
o By implementing workarounds and solutions to avoid schedule delays, the costs
of the projects increased.
o The costs associated with labor and rate charges that impacted the cost
overruns had nothing to do with the schedule.
o Projects with sufficient margins of funds and time had experienced schedule
delays but did not experience cost overruns.
o Although there has been a relationship between schedule delays and cost
overruns, there has been no causation.
Even though statistics suggest that cost overruns and schedule delays are directly related to
each other, project managers need to look for the root causes for each and create an
awareness in their organizations of other factors that could lead to either or both overruns. This
effort could help to improve understanding of the relationships among scheduling, costs,
benefits, and earned value.
2. Estimate Activity Costs

The total project cost is often estimated during the initiating phase of the project or when the
project charter or a proposal is prepared
• The estimated cost for each specific activity can include the following elements:
o Labor — estimated costs for the various types or classifications of people who
are expected to work on the project, based on the estimated work time (not
necessarily the same as the activity’s estimated duration) and the dollar labor
rate for each person or classification
o Materials — the estimated costs of materials that the project team or contractor
needs to purchase for the project
o Equipment — equipment that must be purchased as part of the project
o Facilities — special facilities or additional space for the project team, for
security, or for storing materials, or to build, assemble, and test the project end
item (deliverable)
o Subcontractors and consultants — outsourced when project teams or
contractors do not have the expertise or resources to do certain project tasks
4
o Travel — travel (other than local travel) required during the project
o Reserve — also referred to as contingency, to cover unexpected situations that
may come up during the project, such as items that may have been overlooked
when the initial project scope was defined, activities that may have to be redone
because they may not work the first time (redesigns), or a high-probability or
high-impact risk that may occur
• Figure 7.1 depicts the estimated costs for each activity in the consumer
market study project.
• It is good practice to have the person who will be responsible for the costs associated
with the work make the cost estimates.
• Historical data can be used as on the current project.
• Cost estimates should be reasonable and realistic.
• At the beginning of the project, it may not be possible to accurately estimate the costs
for all activities. This is especially true for longer-term projects. It may be easier to
estimate the costs for near-term activities, but as the project progresses, the project
team can progressively elaborate the estimated costs as more information is known or
becomes clear to allow for more accurate estimated costs.
3. Determine Project Budget

• The project budgeting process has two steps.
o First, the project cost estimate is allocated to the various work packages in the
project work breakdown structure.
o Second, the budget for each work package is distributed over the duration of the
work package.
A. Aggregate Total Budgeted Cost

• Allocating total project costs for the various elements to the appropriate work packages
will establish a total budgeted cost (TBC) for each work package.
• There are two approaches to establishing the TBC for each work package: top-down
and bottom-up.
• Often, the sum of the initial estimated costs is greater than the amount of funds
budgeted by the sponsor. Several iterations may need to be made to reduce the costs.
• Figure 7.2 illustrates the allocation for a $600,000 project. The costs are
assigned to each work package.
• When the budgets for all the work packages are summed, they cannot
exceed the total project budgeted cost.
• Figure 7.3 and Figure 7.4 depict the network diagram and the work
breakdown structure with costs assigned. This example is used
throughout the remainder of this chapter.
B. Develop Cumulative Budgeted Cost

• Once a total budgeted cost has been established for each work package, the second
step in the project budgeting process is to distribute each TBC over the duration of its
work package.
• A cost is determined for each period, based on when the activities that make up the
work package are scheduled to be performed to create the time-phased budget.
5
• The cumulative budgeted cost (CBC) is the amount budgeted to accomplish the work
scheduled to be performed up to that point in time.
• Figure 7.5 depicts the budgeted cost by period for the packaging
machine project.
• Figure 7.6 depicts the cumulative budgeted cost curve for the packaging
machine project. The points on the graph correspond to the cumulative
total in Figure 7.5.
• The CBC for the entire project or each work package provides a baseline against which
actual cost and work performance can be compared at any time during the project.
• The cumulative budget is the standard against which actual cost is compared.
4. Determine Actual Cost

• Once the project starts, it’s necessary to keep track of actual cost and committed cost
so they can be compared to the CBC.
A. Actual Cost
• To keep track of actual cost on a project, it’s necessary to set up a system to collect, on
a regular and timely basis, data on funds actually expended.
• Large projects will have charge codes for the work package numbers to determine how
the actual costs compare to the planned costs.
B. Committed Costs
• In many projects, large dollar amounts are expended for materials or services
(subcontractors, consultants) that are used over a period of time longer than one cost
reporting period.
• These committed costs need to be treated in a special way so the system periodically
assigns a portion of their total cost to actual cost.
• Committed costs are also known as commitments or encumbered costs.
• Costs are committed when an item is ordered, even though actual payment may take
place at some later time.
C. Compare Actual Cost To Budgeted Cost

• As data are collected on actual cost, including portions of any committed cost, they need
to be totaled by work package so they can be compared to the cumulative budgeted
cost.
• Cumulative actual cost (CAC) should be calculated.
• Figure 7.7 indicates that at the end of week 8, $68,000 has actually
been expended on this project, although only $64,000 was budgeted as
shown in Figure 7.5.
• With the CAC values, it’s possible to draw a cumulative actual cost curve
as shown in Figure 7.8.
5. Determine Value of Work Performed

• Consider a project for painting ten similar rooms over ten days (one room per day) for a
total budgeted cost of $2,000. The budget is $200 per room.
6
• At of the end of day 5, you determine that $1,000 has actually been spent, but what if
only three rooms have been painted?
• Earned value, the value of the work actually performed, is a key parameter that must be
determined throughout the project.
• Determining the earned value includes collecting data on the percent complete for each
work package, and then converting this percentage to a dollar amount by multiplying the
TBC of the work package by the percent complete.
• In many cases, the estimate is subjective.
• It’s important that the person estimating the percent complete not only assess how
much work has been performed but also consider what work remains to be done.
• For example, in the project to paint ten rooms for $2,000, if three rooms have been
completed, it’s safe to say that 30 percent of the work has been performed.
• The earned value is
o 0.30 x $2,000 = $600
• Figure 7.9 depicts the cumulative percent complete by period for the
packaging machine project.
• Figure 7.10 depicts the cumulative earned value by period for the
packaging machine project.
• Figure 7.11 illustrates the CBC, CAC, and CEV for the entire project.
6. Analyze Cost Performance

• The following four cost-related measures are used to analyze project cost performance:
o TBC (total budgeted cost)
o CBC (cumulative budgeted cost)
o CAC (cumulative actual cost)
o CEV (cumulative earned value)
• Plot CBC, CAC, and CEV curves on the same graph to reveal any trends toward
improving or deteriorating cost performance.
• In the packaging machine project we see that:
o $64,000 was budgeted through the end of week 8.
o $68,000 was actually expended by the end of week 8.
o $54,000 was the earned value of work actually performed by the
end of week 8.
• Figure 7.12 depicts the packaging machine project status as of week 8.
A. Cost Performance Index

• The cost performance index (CPI) is a measure of the cost efficiency with which the
project is being performed. The formula for determining the CPI is
• Cost performance index = Cumulative earned value/Cumulative actual cost
o CPI = CEV/CAC
• In the packaging machine project, the CPI as of week 8 is given by
7
o CPI = $54,000/$68,000 = 0.79

• This ratio indicates that for every $1.00 actually expended, only $0.79 of earned value
was received.
• When the CPI goes below 1.0 or gradually gets smaller, corrective action should be
taken.
B. Cost Variance
• Another indicator of cost performance is cost variance (CV), which is the difference
between the cumulative earned value of the work performed and the cumulative actual
cost.
• Cost variance = Cumulative earned value – Cumulative actual cost
o CV = CEV – CAC
• In the packaging machine project, the cost variance as of week 8 is given by
o CV = $54,000 – $68,000 = –$14,000
• This calculation indicates that the value of the work performed through week 8 is
$14,000 less than the amount actually expended.
7. Estimate Cost at Completion

• Based on analysis of actual cost, it’s possible to forecast what the total costs will be at
the completion of the project or work package.
• There are three different methods for determining the forecasted cost at completion
(FCAC).
o The first method assumes the remaining work will be done at the same rate of
efficiency as the work performed so far.
 Forecasted cost at completion = Total budgeted cost/Cost performance
index
 For the packaging machine project, the forecasted cost at completion is
given by:
 FCAC = $100,000/0.79 = $126,582
o A second method for determining the forecasted cost at completion assumes
that, regardless of the efficiency rate the project or work package has
experienced in the past, the remaining work will be done according to budget.
 Forecasted cost at completion = Cumulative actual cost+ (Total
budgeted cost – Cumulative earned value)
 For the packaging machine project, the forecasted cost at completion is
given by:
 FCAC = $68,000 + ($100,000 – $54,000)
 = $68,000 + $46,000
 = $114,000
o A third method for determining the forecasted cost at completion is to re-
estimate the costs for all the remaining work to be performed and add this re-
estimate to the cumulative actual cost.
 FCAC = CAC + Re-estimate of remaining work to be performed
o Another measure is the to-complete performance index (TCPI)
8
 TCPI = (TBC – CEV)/(TBC – CAC)

 TCPI = ($100;000 − $54;000)/( $100,000 − $68,000)
 = $46,000/$32,000
 = 1.44
8. Control Costs
• The key to effective cost control is to analyze cost performance on a regular and timely
basis.
• It’s crucial that cost variances and inefficiencies be identified early so that corrective
action can be taken before the situation gets worse.
• Cost control includes the following:
o Analyzing cost performance to determine which work packages may require
corrective action.
o Deciding what specific corrective action should be taken.
o Revising the project plan—including time and cost estimates—to incorporate the
planned corrective action.
• When evaluating work packages that have a negative cost variance, focus on taking
corrective actions to reduce the costs of two types of activities:
o Activities that will be performed in the near term. If you put off corrective actions
until some point in the distant future, the negative cost variance may deteriorate.
o Activities that have a large cost estimate. Taking corrective measures that
reduce the cost of a $20,000 activity by 10 percent will have a larger impact than
totally eliminating a $300 activity.
• There are various ways to reduce the costs of activities.
o Substitute less expensive materials.
o Assign a person with greater expertise or more experience to perform or help
with the activity.
o Reduce the scope or requirements.
o Increase productivity through improved methods or technology.
• In many cases, there will be a tradeoff—reducing cost variances will require a reduction
in project scope or a delay in the project schedule.
• The key to effective cost control is aggressively addressing negative cost variances and
cost inefficiencies as soon as they are identified.
9. Manage Cash Flow

• It is important to manage the cash flow on a project.
• Managing cash flow means making sure sufficient payments are received from the
customer in time so that you have enough money to cover the costs of performing the
project.
• The key to managing cash flow is to ensure that cash comes in faster than it goes out.
• The contractor might try to negotiate payment terms that require the customer to do one
or more of the following:
9
o Provide a down payment at the start of the project.

o Make equal monthly payments based on the expected duration of the project.
o Provide frequent payments, such as weekly or monthly payments rather than
quarterly payments.
• The worst scenario from the contractor’s point of view is to have the customer make
only one payment at the end of the project.
• The contractor can control its outflow of cash by delaying payment until it is due.
10. Cost Estimating for Information Systems Development

• Chapter 4 defined the information system (IS) as a computer-based system that accepts
data as input, processes the data, and produces information required by users.
• Chapter 5 revealed that scheduling is often done in a haphazard manner, resulting in a
large number of IS projects not finishing on time.
• Chapter 6 reinforced the resource requirements planning necessary for people,
hardware, software, data, and network resources.
• This chapter addresses cost estimating in an IS project. Accurately estimating costs and
including a reserve are essential in creating a realistic budget to complete the work
without cost overruns. Having a good plan and schedule helps to develop cost estimates
and a baseline budget.
• Common errors in estimating costs include:
o Underestimating the work time necessary to complete an activity.
o Requiring rework to meet the user requirements.
o Underestimating growth in the project scope.
o Not anticipating new hardware purchases.
o Correcting flaws in excess of the reserve plan.
o Changing the design strategy.
o Increasing resources to fast-track phases of the SDLC.
An IS Example: Internet Applications Development for ABC Office Designs
(Continued)
• Recall from Chapters 4, 5, and 6 that Beth Smith was assigned to be the project
manager by the IS Department of ABC Office Designs.
• Chapter 5 described how Beth had scheduled the ES, EF, LS, and LF times for the
activities necessary to complete the Web-based reporting system development project
for ABC Office Designs.
• Chapter 6 described how Beth and the project team planned the resources for the 60-
day schedule they have to complete the project. Management approved a budget of
$125,000 to complete the project and train the sales staff.
• After confirming with the primary responsible resources that the tasks could be
completed with the estimated level of effort on each task,
o Beth worked with the human resources team to use the hourly wage for each of
the employees to determine the labor costs for each of the Web-based
Reporting System project activities.
10
o Beth and the project team estimated the costs associated with traveling to
complete the interviews with users ($3,000), the price of the packaged software
($500), and the costs of the training materials ($1,300).
o The budgeted costs of the work to complete the project were near the $125,000
limit without training the sales staff.
• Figure 7.13 depicts the estimated activity costs for the Web-Based
Reporting Development project with a 5% reserve for cost overruns, fast-
tracking of the project, or increased costs of materials or travel for the
interviews.
11. Project Management Information Systems

• All costs associated with each resource in a project can be stored, and the software will
calculate the budget for each work package and for the entire project.
• Project management software usually allows the user to define different rate structures
for each resource and when charges for those resources will actually be accrued.
• Cost tables and graphs are often available to help analyze cost performance.
• See Appendix A for a thorough discussion of Project Management Software.
12. Critical Success Factors

• Estimated activity costs must be based on the estimated activity resources.
• The person who will be responsible for performing the activity should estimate the costs
for that activity. This generates commitment from the person.
• Cost estimates should be reasonable and realistic.
• Once the project starts, it is important to monitor actual costs and work performance to
ensure that everything is within budget.
• A system should be established to collect, on a regular and timely basis, data on costs
actually expended and committed, and the earned value (percent complete) of the work
performed, so they can be compared to the cumulative budgeted cost (CBC).
• If at any time during the project it is determined that the project is overrunning the
budget, or the value of the work performed is not keeping up with the actual amount of
costs expended, corrective action must be taken immediately.
• It is important to use the time-phased cumulative budgeted cost (CBC), rather than the
total budgeted cost (TBC), as the baseline against which cumulative actual cost (CAC)
is compared. It would be misleading to compare the actual costs expended to the total
budgeted cost, because cost performance will always look good as long as actual costs
are below the TBC.
• To permit a realistic comparison of cumulative actual cost to cumulative budgeted cost,
assign portions of the committed costs to actual costs while the associated work is in
progress.
• The earned value of the work actually performed is a key parameter that must be
determined and reported throughout the project.
• For each reporting period, the percent complete data should be obtained from the
person responsible for the work. It is important that the person make an honest
assessment of the work performed relative to the entire work scope.
• One way to prevent inflated percent complete estimates is to keep the work packages or
activities small in terms of scope and duration. The person estimating the percent
11
complete should assess not only how much work has been performed but also what
work remains to be done.
• The key to effective cost control is to analyze cost performance on a timely and regular
basis. Early identification of cost variances (CV) allows corrective actions to be taken
immediately, before the situation gets worse.
• For analyzing cost performance, all the data collected should be as current as possible
and be based on the same reporting period.
• Trends in the cost performance index (CPI) should be monitored carefully. If the CPI
goes below 1.0 or gradually decreases, corrective action should be taken.
• As part of the regular cost performance analysis, the estimated or forecasted cost at
completion (FCAC) should be calculated.
• The key to effective cost control is to aggressively address work packages or activities
with negative cost variances and cost inefficiencies as soon as they are identified. A
concentrated effort must be applied to these areas. The amount of negative cost
variance should determine the priority for applying these concentrated efforts.
• When attempting to reduce negative cost variances, focus on activities that will be
performed in the near term and on activities that have large estimated costs.
• Addressing cost problems early will minimize the negative impact on scope and
schedule. Once costs get out of control, getting back within budget becomes more
difficult and is likely to require reducing the project scope or quality or extending the
project schedule.
• The key to managing cash flow is to ensure that cash comes in faster than it goes out.
• It is desirable to receive payments from the customer (cash inflow) as early as possible,
and to delay making payments to suppliers or subcontractors (cash outflow) as long as
possible.
13. Summary
• The total project cost is often estimated during the initiating phase of the project when
the project charter or a proposal is prepared, but detailed plans are not usually prepared
at that time.
• The project budgeting process has two steps: the budget for each work package is
determined, and the budget for each work package is then distributed over the expected
time.
• Aggregating the estimated costs of the specific activities for the appropriate work
packages in the work breakdown structure will establish a total budgeted cost (TBC).
• The cumulative budgeted cost (CBC) is the time-phased baseline budget that will be
used to analyze the cost performance of the project.
• At any time during the project, it is possible to forecast what the total costs will be at the
completion of the project or work package based on analysis of actual cost expended
and the earned value of work performed.
• The key to effective cost control is to analyze cost performance on a regular and timely
basis.
• It is important to manage the cash flow on a project.
Questions
1. Describe why it is necessary to develop a baseline budget for a project.
12
It is necessary to prepare a budget, or plan, for how and when funds will be spent over the
duration of the project to ensure that everything is within budget.
2. List and describe items that should be included when estimating activity costs.
The cost section of a proposal may consist of elements such as the following:
• Labor. The estimated hours and hourly rate for each person or classification.
• Materials. The materials that need to be purchased for the project.
• Subcontractors and consultants (if used). People who have the resources or experience
to perform certain tasks that the project team cannot.
• Equipment and facilities rental. Special equipment, tools, or facilities the contractor
needs for the project.
• Travel.
• Reserves. An amount to cover unexpected situations that may come up during the
project.
3. What does the term reserve mean? Should a reserve amount be included in a project
proposal? Explain your answer.
Reserves are funds to cover unexpected situations that may occur during the project. The
contractor or project team may include an amount for reserve to cover unexpected situations
that may come up during the project within the estimated budget in the proposal. For example,
items may have been overlooked when the project cost estimates were prepared, tasks may
have to be redone because they did not work the first time, or the costs of labor (wages,
salaries) or materials may escalate during a multi-year project.
4. What is the problem with making cost estimates too conservative or too aggressive?
Cost estimates should be aggressive yet realistic. If cost estimates are overly conservative, the
total estimated cost for the project is likely to be more than the customer is willing to pay—and
higher than that of competing contractors. On the other hand, if cost estimates are overly
optimistic and some unexpected expenditures need to be made, the contractor is likely to either
lose money or suffer the embarrassment of going back to the customer to request additional
funds to cover cost overruns.
5. Describe the project budgeting process.
The project budgeting process has two steps. First, the project cost estimate is allocated to the
various work packages in the project work breakdown structure. Second, the budget for each
work package is distributed over the duration of the work package.
6. Define the following: TBC, CBC, CAC, CEV, CPI, CV, FCAC and TCPI. How is each
calculated?
• TBC: total budgeted cost

o a) top-down = a portion of the total project cost is allocated to each work
package.
o b) bottom-up = the sum of the costs of all the activities that make up that work
package.
• CBC: cumulative budgeted cost = the amount budgeted to accomplish the work
• CAC: cumulative actual cost = the amount actually spent to accomplish the work
• CEV: cumulative earned value = % complete X TBC (for the work package)
• CPI: cost performance index = CEV/CAC
13
• CV: cost variance = CEV – CAC

• FCAC: forecasted cost at completion
o a) FCAC = TBC/CPI
o b) FCAC = CAC + (TBC – CEV)
o c) FCAC = CAC + Re-estimate of remaining work to do
• TCPI: to-complete performance index = (TBC – CEV) / (TBC – CAC)
7. Why is it necessary to track actual and committed costs once a project starts?
It is necessary to tract actual and committed costs so they can be compared to the CBC, in
order for the team to take corrective action before it’s too late.
8. Why is it necessary to calculate the earned value of work performed? How is this done?
It is important to calculate the earned value of work performed so that if the work performed isn’t
keeping up with the actual cost, corrective action can be taken, even if the actual cost is in line
with the CBC. Determining the earned value includes collecting data on the percent complete for
each work package and then converting this percentage to a dollar amount by multiplying the
TBC of the work package by the percent complete.
9. Give an example of calculating a cost performance index. What does it mean when the
CPI is below 1.0? What does it mean when the CPI is above 1.0?
Cost performance index = CEV/CAC
If CPI is less than 1.0, it means that for every dollar expended, less than one dollar of earned
value was received. If CPI is greater than 1.0, it means that for every dollar expended, more
than one dollar of earned value was received.
10. What does it mean when cost variance is negative? What does it mean when cost
variance is positive? When evaluating a work package with a negative cost variance, on
what two types of activities should you focus? Why?
Cost variance = Cumulative earned value – Cumulative actual cost
If the CV is negative, it means the value of the work performed is less than the amount actually
expended. If the CV is positive, it means the value of the work performed is more than the
amount expended.
Project managers should focus on:

• Activities that will be performed in the near term. If you put off corrective actions until
some point in the distant future, the negative cost variance may deteriorate.
• Activities that have a large cost estimate. Usually, the larger the estimated cost for an
activity, the greater the opportunity for a large cost reduction.
11. What is the key to managing cash flow? How can this goal be accomplished?
The key to managing cash flow is to ensure that cash comes in faster than it goes out. This can
be accomplished by asking the customer to:
• provide a down payment at the start of the project.
• make equal monthly payments based on the expected duration of the project.
• provide frequent payments, such as weekly or monthly payments rather than quarterly
payments.
12. a. Refer to the table below. What is the cumulative budgeted
cost at the end of week 6? Amounts are in thousands of
dollars.
The cumulative budgeted cost at the end of week 6 is $100,000.
14
b. Below is a table of actual costs. What is the cumulative actual cost at the
end of week 6? Determine whether there is a cost overrun or underrun.
What is causing it? Amounts are in thousands of dollars.
Week
1 2 3 4 5 6
Cumulative 10 36 54 66 95 112
There is a cost overrun of $12,000. The actual cost of Task 1 was $34,000 while only $30,000
was budgeted for it. The actual cost so far of Task 2 is $68,000, while
only $60,000 had been budgeted up to week 6. The actual cost of Task 3
is $10,000 which equals its budgeted amount at week 6.
c. Below is a table of the cumulative percentages of work completed by
the end of week 6. What is the cumulative earned value of the
project at the end of week 6? Is it good?
Cumulative Earned Value by Week
TBC 1 2 3 4 5 6
Task 1 30 9 24 30 30 30 30
Task 2 70 7 17.5 24.5 38.5 45.5
Task 3 40 4 8
Task 4 30
Total 170 9 31 47.5 54.5 72.5 83.5
The cumulative earned value at the end of week 6 is only $83,500; however, $112,000 has
already been spent.
d. What is the CPI at the end of week 6? What is the CV?
CPI = 83,500 / 112,000 = .7455
CV = 83,500 – 112,000 = -28,500
e. Calculate the FCAC using the first two methods described.
Method 1 – Assuming the same rate of efficiency.
FCAC = TBC / CPI
FCAC = $170,000 / .7455 = $228,034.87
Method 2 – Perform the remainder of the work according to budget.

FCAC = CAC + (TBC – CEV)
FCAC = $112,000 + ($170,000 - $83,500)
FCAC = $112,000 + $86,500
FCAC = $198,500
Internet Exercises
Assign the Internet Exercises to your students as homework or complete them together in a
computer lab.
A number of cost analysis tools are found on the Internet. Adding the term "project
management" to the search will yield results focused on cost benefit analysis for projects.
Results of the cost forecasting search are centered on management in general cost forecasting.
Adding the term "project management" changes the sites found to those focused on cost
forecasting in project management.
ProjectSmart provides project management resources for project managers at all levels. The
site features articles, presentations, and other information of interest around the world. The
White Papers link contains to a number of papers on topics to help improve project
15
management performance. The site’s articles, books, presentations, and case studies that help
reinforce the project management concepts.
Case Study #1 A Not-For-Profit Medical Research Center

This case continues through to chapter 8. Each chapter has questions to reinforce the concepts
presented. Have students save their work for this case study for the work they will do in chapter
8. This is an open-ended case study. The students have the opportunity to be very creative on
this one. Encourage that creativity.
Answers to Case Questions
Answers will vary from student to student for each question.
1. Using the schedule from Chapter 5, estimate the cost for each activity.
If using Microsoft Project, enter the rates of the work and material resources on the Resource
Sheet. Assign the cost resource amount on the Task Information window for the task where the
resource is assigned. Any resources that are not assigned for the duration of a work package
should have a percent of effort assigned. Or the task should be changed to a fixed duration and
the amount of work changed.
2. Determine the total budgeted cost for the project.
The determination of the TBC for the project is completed using the top-down or bottom-up
approach. If using Microsoft Project and assigning the costs to the work packages, the approach
is bottom-up.
• a) top-down = allocates a portion of the total project cost to each work package.
• b) bottom-up = sums the costs of all the activities that make up that work package.
3. Prepare a budgeted cost by period table (similar to Figure 7.5) and a cumulative budgeted
cost (CBC) curve (similar to Figure 7.6) for the project.
In Microsoft Project, the visual report, Cash Flow report, depicts the amount of cost per quarter,
week, or day and the cumulative budgeted cost curve. The Cash Flow report provides a table of
the costs and the total costs per week for the project.
Group Activity
Divide the course participants into the same groups as for the previous chapter’s group activity.
Then address each of the steps listed above.
Case Study #2 The Wedding
This case continues through to chapter 8. Each chapter has questions to reinforce the concepts
presented. Have students save their work for this case study for the work they will do in chapter
8. This is an open-ended case study. The students have the opportunity to be very creative on
this one. Encourage that creativity.
Answers to Case Questions
1. Using the schedule from Chapter 5, estimate the cost for each activity.
If using Microsoft Project, enter the rates of the work and material resources on the Resource
Sheet. Assign the cost resource amount on the Task Information window for the task where the
resource is assigned. Any resources that are not assigned to work the duration of a work
package should have a percent of effort assigned, or the task should be changed to a fixed
duration and the amount of work changed.
2. Determine the total budgeted cost for the project.
Determine the TBC for the project using the top-down or the bottom-up approach. If using
Microsoft Project and assigning the costs to the work packages, the approach is bottom-up.
16
• a) top-down = allocates a portion of the total project cost to each work package.
• b) bottom-up = sums the costs of all the activities that make up that work package.
3. Prepare a budgeted cost by period table (similar to Figure 7.5) and a cumulative budgeted
cost (CBC) curve (similar to Figure 7.6) for the project.
If using Microsoft Project, the visual report, Cash Flow report, depicts the amount of cost per
quarter, week, or day and the cumulative budgeted cost curve. The Cash Flow report provides a
table of the costs and the total costs per week for the project.
Group Activity
Divide the course participants into the same groups as for the previous chapter’s group activity.
Then address each of the steps listed above.
Optional Supplemental Activities

1. Have the students read the real-world vignettes for the chapter and create plans for
managing the costs of the projects.
2. Assign the student to read the chapter and answer all the Reinforce Your Learning
questions and the questions at the end of the chapter.
3. Have students read the Plan of Attack vignette from Chapter 4. The project
manager worked through the project plan to keep the cost within the sponsor's
budget by deleting any "nice to have" features and keeping the essential features.
4. Explore the articles on the PMFORUM site and in the PWWorldToday website.
Have the students contact an author of an article to ask questions about how the
author manages costs associated with a project.
Appendix #1 - Time–Cost Trade-Off

• The time–cost trade-off methodology is used to incrementally reduce the project
duration with the smallest associated increase in incremental cost.
• It is based on the following assumptions:
o Each activity has two pairs of duration and cost estimates: normal and crash.
o The normal time is the estimated length of time required to perform the activity
under normal conditions.
o The normal cost is the estimated cost to complete the activity in the normal
time.
o The crash time is the shortest estimated length of time in which the activity can
be completed.
o The crash cost is the estimated cost to complete the activity in the crash time.
• We can incrementally accelerate an activity’s durationfrom its normal time to its crash
time by applying more resources.
• An activity cannot be completed in less than its crash time.
• The resources necessary to reduce an activity’s estimated duration from its normal time
to its crash time will be available when needed.
• Within the range between an activity’s normal and crash points, the relationship between
time and cost is linear. This acceleration cost per time period is calculated as follows:
o (Crash Cost – Normal Cost)/(Normal Time – Crash Time)
17
• Figure 7.14 depicts a network diagram for a project with

normal and crash costs.
• Table 7.1 depicts the costs associated with the Time-Cost
Trade-off for the project.
• The objective of the time–cost trade-off method is to determine
the shortest project completion time based on crashing those
activities that result in the smallest increase in total project cost.
• To accomplish this, it’s necessary to shorten the total project duration, one time period
at a time, crashing only those activities that are on the critical path(s) and have the
lowest acceleration cost per time period.
Questions
1. What is the time–cost trade-off methodology, and when is it used?
The time–cost trade-off methodology is a way to incrementally reduce the project duration with
the smallest associated increase in incremental cost. It is used when the project’s schedule
needs to be accelerated.
2. Why do you need both normal and crash times and costs for this procedure?
You need normal and crash times and costs in order to determine the cost associated with
accelerating the project from a normal timeframe to a crash timeframe.
3. Assume that an activity has a normal time of 20 weeks, a normal cost of $72,000, a crash
time of 16 weeks, and a crash cost of $100,000. By how many weeks, at most, can this
activity’s duration be reduced? What is the cost per week to accelerate this activity?
The activity’s duration can be reduced by 4 weeks at most. This will result in an increased cost
of $7,000/week.
4. Why isn’t it appropriate to crash all of the activities in a project to achieve the shortest
project schedule?
It is not appropriate to crash all the activities because expediting activities not on the critical path
will not reduce the project completion time but will increase total project cost.
Appendix #2 - Microsoft Project

The Appendix in this chapter continues discussing Microsoft Project. Have the students produce
the displays that are shown in the chapter. The images and text give direction on how to enter
costs for resources, produce cost reports, and examine cash flow and earned value.
Figure 7A.1 depicts the Resource Sheet with Work

and Material Rates. Material and work resource
rates are entered on the Resource Sheet. Cost
resource names can be entered on the Resource
Sheet. The cost associated with a cost resource is
added in the Task Information window for the specific task. Resources are assigned either in the
entry table or in the Task Information window. The Accrue At column states where they cost will
accrue.
Figure 7A.2 depicts the Cost Resource Entry for Task. The cost of a cost
resource is entered as a cost on the Resource tab in the Task Information
window. To open the Task Information window, double-click on the task's
name in the Task Name column and click on the Resource tab. Choose
the name of the cost resource using the drop-down arrow in the Resource Name
column for the next open row of Resources. There is no entry for a cost resource in the
Unit column. Only the amount of the cost is entered in the Cost column.
18
Figure 7A.3 depicts the Work Overview Report. The reports in Microsoft Project 2013 are in the
Reports ribbon. If the task resource information is updated, then this report will show the actual
versus baseline for work resources. The Work Overview report provides a quick report for
stakeholders about the key performance information for the project.
Figure 7A.4 depicts the Cash Flow Report. During the planning phase, the cash flow
report communicates the amount expected to be expended during each week of the
project. The cash flow report helps inform the plan for payments from the sponsor.
The dates printed in the report can be selected on the print menu to communicate
costs to the stakeholders.
Figure 7A.5 depicts the Tracking Gantt to Display Actual Finish Dates.
The tracking Gantt chart has two bars for each task. One bar depicts the
planned time duration for the task. The second bar depicts the actual time
duration for the task that has been recorded for the task. As the project
moves forward and the project manager enters actual information for
each task, the tracking Gantt chart displays the project progress as the graphical comparison
display.
Figure 7A.6 depicts the Task Usage Sheet Assignment

Information for Cost Resource window. The expenses of a cost
resource is recorded in this assignment window and the percent
complete. Entry of costs in this manner will have the costs
accumulate in the costs reports but do not add to the earned
value calculations.
Figure 7A.7 depicts the depicts the Change in Status Date. To

calculate the Earned Value of a project, the status date must be
set to the current or a prior date. If you are practicing with the
project, be sure to change the Current Date setting to a date
equal to or after the desired status before setting the status date
for the project
Figure 7A.8 depicts the Cash Flow Report. During the planning phase, the cash
flow report communicates the amount expected to be expended during each
week of the project. The cash flow report helps inform the plan for payments
from the sponsor. The dates printed in the report can be selected on the print
menu to communicate costs to the stakeholders. Because the status date has
been updated, the actual costs will be reflected on this report for the status
date if the actual work has been recorded for the activities and resources.
Figure 7A.9 depicts the Task Cost Overview Report. The budget report displays
the total cost, baseline cost, and variance for each activity. Be sure to save the
project baseline when planning is complete in order to populate a report like the
budget report and track the actual costs versus the planned costs. As with other
reports, you can select the number of pages and the dates for the report on the
print menu for the budget report.
Figure 7A.10 depicts the Cost Variance Table for Tasks. This cost table
is one of the table views available in Microsoft Project. Entry, Schedule,
and cost are table types. If you view the Resource Sheet and choose the
cost table view, you can see the costs for the resources by resource. To
make sure that you view the costs for the tasks, be sure to have the Gantt chart entry table
visible before choosing to view the cost table. The Tracking Gantt is visible in the Gantt chart
window by selecting Tracking Gantt in the Task Views group.
19
Figure 7A.11 depicts the Cost Variance Table for Resources. To view the costs for resources,
first view the Resources Sheet in the Resource Views group. Choose the Cost table view in the
Data group on the View ribbon. As with viewing the cost of the tasks, the baseline for the project
must have been created for the comparison to be made to the actual progress of the project. If
tasks finish early, the variance will indicate that the project is operating under budget.
Figure 7A.12 depicts the Earned Value Table. The table depicts the
budgeted cost of work scheduled, earned value of work performed, actual
cost of work performed, budgeted cost at completion, estimated cost at
completion, and any variances. Tracking actual progress and setting the
baseline are required to populate this table. Like the Cost, Schedule, and Entry tables, the
Earned Value table is another view in the Data group on the View ribbon. Note that MS Project
2016 includes the cost resource within the Earned Value (BCWP) column for the project and
does not include the value of the cost resource in its calculations for Planned Value (BCWS) and
for AC (ACWP) on the Earned Value table.
Figure 7A.13 depicts the Resource Sheet with

the change for Travel Expense from a cost
resource to a material resource. If you are
producing reports that require you to have all
costs included in the Planned Value (BCWS) and the AC (ACWP), all resources for your project
should be entered as work or material resources.
Figure 7A.14 depicts Change of Percent Complete for Material

Resource on the Task Usage Sheet Assignment Information
window to update the material resource to is actual costs and
completion.
Figure 7A.15 depicts the update of the actual costs of the

resource that was changed from a cost resource to a
material resource. This change was made to have the costs
of the resource in the totals for in PV (BCWS) and AC
(ACWP).
Figure 7A.16 depicts the Earned Value Table on the Tracking Gantt chart
that now updated to include the cost of the travel expense in PV (BCWS)
and AC (ACWP).
Figure 7A.17 depicts the Visual Reports–Create Report Window to

indicate the choices for creating the Earned Value Over Time visual
report. Visual reports are generated and open in Microsoft Excel and
Microsoft Visio. The icon next to the name indicates whether the report
will open in Excel or Visio. You can set visual cash flow reports to display
quarters, weeks, or days by clicking on the plus or minus next to the data
label on the data worksheet in Microsoft Excel.
Figure 7A.18 depicts the Visual Earned Value Over Time Report, Displayed in
Microsoft Excel. The graph displays the earned value, the planned value, and
the actual costs for the project. Setting a baseline and entering the project
progress are necessary to provide the data to generate this report.
20
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CHAPTER IV.
At the table was sitting a matronly lady in black, with a stodgy and
inexpressive face. She was writing letters at a neat little morocco
desk; and on the entrance of her pupil followed by a good-looking
but perfectly unknown gentleman, she drew herself up from her
occupation, and rubbed her nose with her ivory-handled pen in
evident dismay.
“Dear me!” she ejaculated softly, in tones of abject consternation,
“who has she picked up now?”
Before the elder lady had time to give any other indication of the
manner in which she intended to receive the stranger, the young girl
flung her uninjured arm from behind round the neck of her less
impulsive fellow-woman, and cried:
“Mammy Ellis, you see—you see I was right. This is the gentleman
who saved me from being burnt. He has come to say he is sorry.”
And with this introduction, uttered in a tone of the utmost triumph,
she made a step back, as if she expected that a full and
uninterrupted view of him would remove all lingering doubts as to the
perfect eligibility of her new acquaintance.
It was rather embarrassing certainly. For the elderly lady, who had
risen from her chair and was taking a good look at the midnight
intruder, continued to glare at him with cold British stolidity, and
Lauriston had none of the aplomb given by a long and varied course
of flirtations.
“I am afraid, madam,” he began humbly, and with a good deal of
hesitation, “that you—that you will not forgive my—er—my
appearance here, I mean my last appearance, in fact my first
appearance.” He paused to gather an idea to go on with, and
continued his explanation more calmly, taking care, with all the signs
of conscious guilt, to avoid the lady’s stony eye. “A comrade of mine
(his name is Massey—we are lieutenants in the same regiment, ——
th Hussars) gave me the address ‘36, Mary Street, West,’ as that of
his brother, who is an old friend of mine. He told me to go right in and
up to the first floor. Of course I must have come to the wrong Mary
Street, but I knew of no other, drove straight here, and carrying out
my instructions, had the misfortune, as you know, to intrude upon
this young lady, with the unhappy consequence of waking her and
causing the accident. I cannot express my regret. I have been
ashamed to call. I would bring my friend to back me up if I thought
you would believe him more than me. But you would not. I am a
gentleman, madam, an officer. I hope you will believe me.”
Whether the eloquence of this speech would have been strong
enough to melt the rigid lady is unknown. But there is magic to
feminine ears in the word “officer”; and as the young fellow brought
his explanation to an end with much brusque fervour, she softened
visibly, and glanced from him to her charge in a wavering and
uncertain manner.
“Well, really I don’t know,” she began vaguely, when the girl cut her
short, slipping her slim hand between her guardian’s plump arm and
matronly figure, and resting her head, gently tilted back, on the lady’s
breast in wheedling and seductive fashion.
“Yes, yes, you do know, Mammy Ellis, you know your own
husband was an officer—you’re always telling us so, and you’re only
being dignified for fun, and you must shake hands with this
gentleman and thank him for saving your little Nouna from having
her arm burnt off.”
Thus adjured, Mrs. Ellis, still doubtfully murmuring and of rather
distressful visage, did end by holding out a crumby hand, which
George Lauriston shook with reverence and gratitude. He had got
his cue now, and he at once made respectful inquiries about the
husband, was fortunate enough to be able to tell the widow certain
details concerning the regiment to which he had belonged, and soon
succeeded in obtaining the lady’s confidence to such an extent that
she entertained him with a long and minute account of the late
officer’s distinguished though bloodless services to his country, and
of the niggardliness of an ungrateful government to the hero’s family.
George was becomingly overwhelmed with indignation, though the
monotony of the narrator’s delivery, the pleasant atmosphere of the
half-darkened room, the window of which was shaded with thick
blinds, and the sight of Miss Nouna stretched comfortably in an
American well-cushioned chair, waving a palm-leaf lazily to keep the
flies off, and looking at him half shyly, half mischievously from behind
it through long black eyelashes, all tended to lull him into a drowsy
state, in which he half imagined himself to be in some tropical
country where passions spring up in a day to a fervour never felt in
foggy England, where life flows on without energy or effort, and
where woman, instead of being the modest partner of our joys and
sorrows, is the passionate, voluptuous and irresponsible source of
them.
The apartment, though far smaller, more commonplace and less
gorgeous than the room which he had seen on his first visit, helped
the illusion. Tall narrow glasses from floor to ceiling on each side of
the door, reflected a long, two-tiered stand full of large-leaved
hothouse plants which ran the whole length of the windowed-wall of
the room. Half-a-dozen of these plants were little orange trees, their
round yellow fruit giving pretty touches of colour to the dark green
mass, while the white blossoms gave forth a faint, sweet perfume.
The glass over the mantelpiece was draped with dark tapestry
curtains, caught up here and there on each side by palm-leaf and
peacock fans, of the kind with which a freak of fashion has lately
made us all familiar. The curtains came down to the ground, while
the deep valance which hung from the mantelpiece over the empty
fireplace was caught up in the middle by a bronze statuette of a
Hindoo girl, whose right arm held high above her head a shaded
lamp. A pair of black Persian kittens were curled up asleep on a
cushion at the feet of the statue. A harp stood in one corner, and a
guitar lay on a chair. The rest of the room did not harmonise with
these fantastic arrangements. The best had been done to conceal a
bilious “high art” carpet by means of handsome rugs, and the table
was beautified by an embroidered cover; but the chairs and side-
board breathed forth legends of no more interesting locality than the
Tottenham Court Road, and the walls were made hideous by an
obtrusive and yet melancholy paper.
George Lauriston noted all these things, and his curiosity about
this queer little household grew more intense. Who was this
fascinating young girl? Why was she living in this dingy corner of
London with the garrulous middle-aged lady who must evidently find
her impulsive charge “a handful”? The buzz of Mrs. Ellis’s tedious
monologue began at last to madden him, and he followed the young
girl with eager eyes as she slid off her chair and rang the bell.
“I’m thirsty, Mammy Ellis,” she explained. Then, tired of silence,
she swooped down upon the table, thrust the pen her governess had
been using again into the astonished lady’s hand and said, coaxingly
but imperatively: “Write—write to mamma. This gentleman does not
wish to interrupt you. I will entertain him. Tell her what you think of
him. And then I will read the letter, and see if it may go.”
Mrs. Ellis laughed gently, and obeyed with a protest. Evidently that
was the usual order of things between them. Nouna improvised
herself a low seat beside the plants by piling on the floor the
cushions from her American chair, then she crossed her hands
round one knee, and looked up at Lauriston.
“You have not told us your name,” said she diffidently.
“Nouna,” protested the lady from the table.
“Don’t you want to tell us your name?”
“Certainly. George Lauriston.”
“That is a pretty name. Mine is Nouna.”
“Nouna! That is not an English name.”
“Of course not. It is an Indian name. Do you like Indians?”
“I have only known one West Indian lady.”
“West Indian! That is not Indian at all. I come from the land of the
Rajahs. My grandmother was a Maharanee. She was the most
beautiful woman in all India, and she wore chains of diamonds round
her neck that flashed and sparkled like a thousand suns, and she
lived in a marble palace that was called the Palace of Palms, where
the floors glittered with gold, and soft music came like wind through
the halls, and a great tall tower with a minaret and a spire rose up
into the sky over the room where she slept, to tell all the world that
there was the spot where the Lady of the Seven Stars was resting.
And she had a thousand slaves who knelt and bowed themselves to
the earth when she spoke to them, and her palanquin was all of
ebony-wood inlaid with pearl, and it was hung with silver fringe, and
the inside was satin, the colour of the opening roses; and she
travelled on an elephant whose trappings were of gold. Ah, that is
the beautiful land; where the sun is scorching hot on the fields, and
shines bright and glorious, and throws golden darts through the
chinks of the blinds. And yet there the ladies of high rank—like my
grandmother and my mother and I, lie still and cool in their
apartments, or step down soft-footed into their marble baths where
no hot glare can reach them, only the sense that it is warm and
bright outside. Oh, that is the place to live in, to be happy in. How
could my mother leave it to come to a land like this!”
She had worked herself up as she sang the praises of her own
country to a pitch of glowing excitement, which changed suddenly to
an almost heartbroken wail with her last words. Mrs. Ellis looked up
from the table reprovingly.
“You forget, Nouna, that India is a heathen country, and that your
grandmother probably never had the chance of seeing so much as a
single missionary, and seems to have been very ignorant of her
higher duties.”
“There are no duties out there,” sighed Nouna, with a most
plaintive look into the dream-distance from her black eyes; “at least
for the high-caste women. You have only to live, and love, and grow
old, and die, and nothing to learn but what you breathe in from the
flowers and the sweet scents, and love-songs to please your lord the
prince.”
Mrs. Ellis looked scandalised.
“Dear me, Nouna,” she bleated out nervously, “you really don’t
know what you are talking about. You never talked like this before. I
don’t know what Mr. Lauriston will think!”
Mr. Lauriston thought the look of passionate yearning in the young
eyes inexpressibly fascinating, but he did not say so, merely
murmuring something about the allowance to be made for a tropical
temperament. And, Nouna being reduced by the interruption to a
silent trance of regret, the conversation became an intermittent
duologue between the other two until tea was brought in. The
manner in which this was served displayed the same inconsistencies
as the furniture of the room. Sundran, Nouna’s ayah, in her native
dress, placed upon the table an ordinary black and battered tray, on
which stood a chased silver-gilt tea-service of quaint design, cups,
saucers, and plates of a common English pattern, and tiny silver-gilt
tea-spoons with heart-shaped bowls and delicately enamelled dark-
blue handles. A great watermelon lay among vine-leaves in a
shallow silver dish.
Mrs. Ellis laid aside her writing materials and poured out the tea,
but she could not forget the young girl’s alarming outburst.
“I’m sure, Nouna, I don’t know what the Countess would say if she
could hear you, so very particular as she is about your religious
education. I am afraid I have given way to you too much; I ought
never to have let Mr. Rahas fit up that room for you; it fills your head
with all sorts of heathen notions, not fit for a Christian young English
lady.”
“Mamma always lets me have my Indian things about me, and
sends me Indian dresses, and she said herself I might have just one
room without the horrid stiff European chairs and tables,” said
Nouna, her voice taking a particularly sweet and tender inflection at
the word “Mamma.” “But I’m going to give it up; I’ve told Mr. Rahas I
don’t want it, and I’ve pulled down half the things. I will not accept
gifts from one I despise.”
Springing in a moment from languor into life, she put her cup down
on the table and went to the door.
“Come and see what I have done,” said she, beckoning to the
young Englishman, her eyes dancing with mischief.
“Really, Nouna, I must say you are very ungrateful,” said Mrs. Ellis
in despairing tones. “Mr. Rahas is always most considerate and
gentlemanly, and when you said you longed for an Indian room he
put it so prettily, asking whether he might fit up one large sitting-room
as a show-room for his things; and then never showing anybody up
into it! I really think you ought——”
But Nouna had flown out of the room, and she was haranguing
only Lauriston, who had risen obediently at the young girl’s
imperious gesture, but did not like to leave the elder lady alone so
unceremoniously.
“She is a wilful little thing,” he said smiling.
“Oh, Mr. Lauriston, what we English people call wilfulness is lamb-
like docility compared to that girl’s! She’s like an eel, like quicksilver,
like a will-o’-the-wisp.”
“Or a sunbeam,” suggested he.
“Ah, of course, you’re a young man, you think her charming; and
so, I believe, at the bottom of my heart, do I. But give me a good,
sensible, solid, matter-of-fact English girl to look after, rather than
this creature who is shaking with passion one moment, flashing her
teeth, stamping her foot; and the next suffocating you, and crushing
up your bonnet with kisses. As if kisses could cure the headaches
her wild fits give me, or as if you could squeeze resentment out of a
person, as you do water out of a sponge!”
“Has she been in your charge long?”
“Ever since she left school, six months ago,” said Mrs. Ellis with a
sigh. “Her mother, one of the kindest and most charming women I
have ever met, with all the high-bred ease that nothing will give to
Nouna, wished her to have finishing lessons in music and dancing
and languages in London. Music!” ejaculated the poor lady in a
contemptuous manner. “Nothing would ever induce her to learn the
piano, as every well-educated English girl should do. At school, after
her first lesson, she crept down stairs at night, and undid all the
strings of the instrument; so that had to be given up. I believe she
wanted to learn the tom-tom, or some hideous Indian thing with jam-
pot covers at each end, and they had to compromise by teaching her
the harp and the guitar. Then languages! They only managed to get
her to study French by telling her it was one of the dialects of India.
As to dancing, that came to her like magic, from a waltz to a kind of
wild dance of her own, more like the leaps and bounds of a young
animal than the decorous movements of a young lady! I dare not
think what the Countess would say if she could see her.”
“Why doesn’t she live with her mother, then, who would surely
have more influence over her than any one?”
“You must not blame the Countess,” said Mrs. Ellis, as if he had
been guilty of blasphemy. “A more loving mother never lived. You
should read the beautiful letters she writes to her daughter. But she
has married again; and her husband, the Conde di Valdestillas, a
Spanish nobleman much older than herself, is a great invalid, and
she is obliged to travel about with him wherever he fancies to go.”
“But surely the daughter ought to be considered as well as the
husband.”
“The Countess feels that; and next year, when her daughter’s
education will be finished, she intends settling down either in London
or in Paris, and introducing the young lady to the world. If I can only
keep the girl out of serious mischief so long,” sighed the lady, who
seemed delighted to have a confidant; “but really it is too trying. The
first thing we do after we have left the school (I was a boarder there,
and as Nouna had taken a fancy to me, the Countess requested me
to undertake the duties of chaperon) and come to London to look for
apartments, is to pass this house on the way from Paddington to the
Countess’s lawyers, from whom I draw my salary and Nouna’s
allowance. There is a card—‘Apartments, furnished’—in one of the
first-floor windows. Nouna catches sight of the Oriental names on the
board outside, sees Indian lamps in the windows down stairs, and
nothing will satisfy her but to come back to this house and settle
here. Then, of course, the younger gentleman, Mr. Rahas, falls in
love with her and——”
At this point Mrs. Ellis was interrupted by the flinging open of the
door, and Nouna re-appeared, her face distorted with anger, and her
eyes flashing with contempt: like an enraged empress she held open
the door, keeping her head at a very haughty angle, and disdaining
to look at the visitor.
“I know that nothing I can show my guest can have any interest for
him,” she said icily; “but yet I think it would have been more
courteous to me to disguise that fact.”
She made one step towards her American chair, when Lauriston,
with an amused glance at Mrs. Ellis which he might well suppose to
be unseen, hastened to the door, and held it open for her with a bow.
“I beg your pardon,” said he humbly, “I am very much interested in
whatever you like to show me. But you left the room so suddenly
that, before a clumsy man could hope to get up to you, you
disappeared like a wave of the sea.”
She looked up at him with a very intelligent and searching
expression, and was sufficiently mollified to lead the way out, turning
sharply just in time to catch an exchange of glances, amused on the
one side, apologetic on the other, between the visitor and her
guardian.
She affected not to notice this, however, but opened the door of
the next room without speaking, lifted the heavy curtain, ushered him
in, and then shut the door and drew the hanging close. Lauriston
looked about him in astonishment. The thick blinds, which were plain
canvas on the outer, and rose-colour and gold puckered silk on the
inner side, were drawn down, and made the room very dark, except
for the chinks of sunlight that crept in at the sides. But there was
quite enough light left to show what a wreck had been made of the
luxurious beauty of the apartment since the night when it had burst
on his eyes like a vision of fairyland. The silk and muslin hangings
had been half torn from the walls, showing the ugly paper
underneath; the spears and weapons had been tossed down on the
ground as if they were so much firewood; the sandalwood screen
had been folded and pushed into a corner; while of the smaller
ornaments—cushions, daggers, Moorish table—a great pile had
been made in the middle of the floor, and covered up with the tiger
skins turned inside out. Nothing but the plants was respected; she
had not had the heart to hurt them. Lauriston could scarcely help
laughing; but when he glanced at the girl, and saw that she was
standing against the dismantled wall, leaning back with an
expression of as much triumph as if she had sacked a city, he felt
really rather shocked, and clearing his throat he shook his head at
her gravely.
“I did it all,” she said, nodding proudly and glancing round, as if
anxious that no detail of the noble work should escape him. “Rahas
said that Englishmen were cads, that you were a cad, and so I pulled
the things down. Yes, I saw you and Mrs. Ellis laughing at each
other, as if I were a silly little thing, and couldn’t do anything; but you
see I can.”
It was harder than ever not either to burst out laughing, or to catch
her and kiss her like a spoilt child; but Lauriston resisted both
temptations, and said seriously:
“I think it was very silly and very ungrateful of you.”
She brought her head down to a less aggressive angle, and stared
at him in surprise. He quite expected another outburst of anger, but
none came. She only said “Oh!” reflectively in a soft undertone.
“He has been very kind to you, has he not, this Rahas?”
“Ye—es, he has been kind,” slowly, thoughtfully, and reluctantly.
“He wants”—she laughed shyly—“to marry me!”
“Oh!” Lauriston was disconcerted. A sudden flash of jealousy,
acute and unmistakable, flamed up in his heart at the intelligence,
communicated with this provoking coquetry. “You are going to marry
him then?” he said rashly, on the impulse of the moment, unable to
hide from her sharp eyes an expression of pique.
By quite impalpable changes of tone and attitude, she grew upon
the instant a hundred times more seductive, more bewitching.
“Marry him!” She moved her hand to her head languidly. “I don’t
know. One ought to marry the person one loves best—in England,
ought one not?”
“Certainly,” assented Lauriston, wondering at the power this mere
child possessed of moving him, an altogether unsusceptible mortal,
as he flattered himself, to impulses of passion.
“Then I must wait a little longer and be sure,” she said, twisting her
head upon her neck with the daring, instinctive coquetry of a girl of
five.
“You would rather have a—a—an Oriental like this Rahas, wouldn’t
you?” he said in a low voice, his tone bearing more meaning than he
wished.
“I don’t know,” she said, and stooping, she picked up a string of
beads from among the débris on the floor.
He had come a step nearer to her, and as she stooped, by
accident or design—with such a coquette one could not say which—
she stumbled upon a rug and fell forward against him. He seized her
with a gasp, and held her as she looked up with a laughing,
provoking, irresistible face. She felt him shiver as he withdrew from
her with such suddenness that she, leaning upon his arm, almost
staggered.
“What is the matter?” she asked, as he drew out his watch with
fingers so unsteady that he detached the chain.
“I—I beg your pardon,” he stammered, “but I have a most
desperately important appointment with—with my colonel, in fact,
which I shall miss if I don’t fly in the most unceremonious manner.”
Her face changed. A glow, not of anger, but of passionate
disappointment, flushed her face, and the tears welled up into her
eyes. Lauriston grew very hot, and, all in a fever of excitement,
wondered at this.
“When will you come again?” she asked breathlessly, raising her
beautiful face with parted red lips. “You will not come again. Ah, I
know you, you cold Englishman, you will forget me, forget the poor
little girl whom you saw in flames. Oh, no; you must not!” With
another passionate change, her face grew tender and caressing, as
she cooed out the pleading words like music to his unwilling ears.
“Promise you will come again within a week. No, no, a promise won’t
do,” as Lauriston, glad to be let off so easily, opened his mouth.
“Swear, swear that you will come here again—within a week.”
“But—”
“You shall not go till you have sworn.”
The little tigress, with one spring towards the door, locked it and
drew out the key; with another, she had reached the nearest window.
“No, no, don’t. I swear!” cried Lauriston, who saw with stupefaction
that she had raised the blind, and was about to throw the key from
the open window.
She turned round, tossed the key in the air, and caught it in her
hand with a laugh of triumph.
“Now,” she said, “I know you must come. For an English
gentleman always keeps his word.”
She raised the curtain before the door, and put the key in the lock;
before she turned it she twisted herself back towards the young
fellow and said:
“Kiss me!”
He could not hesitate. If she would flirt it was not his fault. He put
his arm round the lithe, bending waist, and pressed a passionate
kiss on her red lips.
“Now I know you will come again,” she whispered as she let him
out.
When Lauriston had taken a decorous leave of the innocent
guardian in the next room, and found himself once more in the
street, he was inclined to think that he had changed his identity.
Some new power, horrible in its strength, seemed to have fastened
upon him, and to twist and turn him like an osier. He walked on
quickly and firmly, trying to recall his old, calmer self.
“I will keep my oath and go there again,” he said to himself with
clenched teeth. “But by all I hold sacred, I won’t see that demon-girl
again. Heaven help the man who may ever trust his happiness in her
hands!”
CHAPTER V.
It was not so easy, after this second interview with the mysterious
lady of Mary Street, for George Lauriston to keep the image of the
little black-eyed enchantress out of his mind. Her prompt and
passionate advances to himself raised strong doubts as to the result
of the education which Mrs. Ellis declared to have been so careful,
while on the other hand, against his better judgment, he would fain
have believed that it was the romantic circumstances of their
strangely made acquaintance which had broken down, for the first
time, the maidenly reserve of the passionate and wayward girl. In
spite of himself, a small, slim, supple form, dark sun-warm
complexion, April changing moods, kisses from fresh young lips that
clung to your own with frank, passionate enjoyment, had all become
attributes of his ideal of womanhood. It came upon him with a shock
therefore, when, a few days later, he suddenly discovered that he
was expected to find his ideal in a lady who was destitute of any one
of them.
It came about in this way. Chief among the houses where George
Lauriston was always sure of a welcome was the town establishment
of Sir Henry Millard, Lady Florencecourt’s brother, an uninteresting
and rather incapable gentleman who had raised himself from poverty
and obscurity by marrying, or rather letting himself be married by, an
American heiress who was the possessor of a quite incalculable
number of dollars. They had three daughters, Cicely, Charlotte, and
Ella, all of whom would be well dowered, and who were therefore
surfeited with attentions which custom had taught them to rate at
their proper value. Lady Millard was a lean, restless, bright-eyed little
woman, who had acquired some repose of manner only by putting
the strongest constraint upon herself, and who was consumed by an
ardent ambition to be the mother-in-law of an English duke. Sir
Henry’s whole soul was bound up in a model farm in Norfolk, which
his wife’s fortune enabled him to mismanage with impunity. He had
never got over his intense disgust with his daughters for not being
sons, and he left them and the disposal of them entirely in the hands
of his wife and of their uncle Lord Florencecourt, who, having no
daughters of his own, took an almost paternal interest in his nieces.
Lord Florencecourt had made up his mind that a marriage
between his favourite, George Lauriston, and one of his nieces
would be an admirable arrangement, giving to the young officer the
money which would do so much to forward his advancement in the
world, and to one of the girls an honourable, manly husband, who
might some day do great things. The match would, besides,
strengthen the bonds of mutual friendship and liking between himself
and the young man.
It was one evening when the two men were driving in a hansom to
dine at Sir Henry’s, that the elder broached the subject in his usual
harsh, abrupt tone, but with a generous fire in his eyes, which
showed the depth and the quality of his interest in the matter.
Lauriston, taken by surprise, betrayed a reluctance, almost a
repugnance, to the idea which filled the elder man with anger and
disappointment.
“I see,” said he, with a short dry laugh. “You have picked up with
some pretty chorus-girl, and are not ready for matrimony.”
“You are mistaken, Colonel, I assure you. I have picked up
nobody. But it is hardly surprising if your constant jibes at love and
matrimony should have taken root in me, who honour your opinions
so much.”
He spoke somewhat stiffly, because he had to choose his words,
feeling rather guilty. Lord Florencecourt broke in brusquely:
“All d——d nonsense! Jibes at love only take root in a young man
to grow into intrigues. There’s an end of the matter; don’t refer to it
again.”
They were at their destination. Lord Florencecourt sprang from the
hansom first, out of temper for the evening; Lauriston followed very
soberly.
Sir Henry’s town house was one of the big mansions of Grosvenor
Square. It had a large dome-like arch over the entrance, and was
painted a violent staring white, which made the smoke-begrimed
houses on either side, with their rusty iron lamp-frames and
antiquated extinguishers, quite a refreshing sight. The interior was
furnished handsomely, in the prevailing upholsterer’s taste, without
any distinguishing features; for Lady Millard, though she still
cherished certain luxurious and unconventional notions which in her
native country she would have indulged, was too much bound down
by the prejudices of her present rank, to dare to infringe ever so little
on the rules which governed the rest of her order. So that while she
inwardly knew an indiarubber plant by itself in a bilious or livid
earthenware vase to be an abomination, she had an indiarubber
plant in a bilious yellow vase in front of her middle dining-room
window, because the Countess of Redscar had one in a livid blue
vase in hers. And in spite of her feeling that to strew a litter of natural
flowers over a dinner-table, to fade and wither before one’s eyes in
the heated air, is stupid, inconvenient, and ugly, she yielded to that,
as she did to every passing fashion set by her higher-born
neighbours.
She followed a more sensible English fashion in having two most
beautiful girls among her children. Cicely and Charlotte, the two
eldest, were tall, fair as lilies, limpid-eyed, small-mouthed, innocent,
sweet and rather silly. Dressed as they were on this evening in white
muslin dresses, which looked to masculine eyes as if they might
have been made by the wearers themselves, though they were in
reality a triumph of a Bond Street milliner, they made the dull minutes
before dinner interesting by their mere physical loveliness.
Unfortunately for her, fortunately perhaps for them, the youngest of
the three girls was a foil, not an addition to the family beauty. Small,
sallow, and plain, Ella Millard did not attempt to make up for her
deficiency in good looks by any special attraction of manner. To most
people she seemed shy, abrupt, and almost repellent; such a
contrast, as everybody said, to her charming and amiable sisters.
But with the minority for whom fools, however beautiful, have no
charm, Ella was the favourite; and George Lauriston, an habitué of
the house, had got into the habit of making straight for the chair by
her side at every opportunity, with the distinct conviction that she
was an awfully nice girl.
On this occasion he took in to dinner the second sister, Charlotte,
and he found that her placid, amiable face and wearisome gabble
about the Opera, the Academy, and Marion Crawford’s new novel—
(Charlotte prided herself on having plenty to say)—irritated him to a
degree he had never before thought himself capable of reaching.
When the gentlemen entered the drawing-room after dinner,
George Lauriston, seeing Ella in a corner by herself, made at once
for the seat by her side. She made way for him almost without
looking up, as if she had expected him.
“How cross you looked at dinner,” she said; “I was glad you took
Charlotte in and not me.”
“No, you were not. If I had taken you I should not have been
cross.”
“That is quite true. Charlotte is sweet-tempered and will put up
with a man’s moods; I should have turned my back upon you and let
you sulk.”
“Yes; you are a hard, disagreeable creature.”
“But such a relief after my poor Charlotte. Now tell me what is the
matter with you.”
“Nothing except ill-temper. At least—to say the truth, I hardly can
tell you.”
“Nonsense. You can tell me anything, after the stream of
nonsense I have heard at different times from you.”
“But this isn’t nonsense. Lord Florencecourt wants me to marry
one of your sisters.”
“Well, I dare say you could get one of them to have you, if I
backed you up. You see I am so out of the running that they think a
good deal of my advice.”
“Don’t tease. He really has set his heart upon it.”
“And pray, my lord commander-in-chief, don’t you think you might
do much worse? They are both as pretty as peaches, perfectly sweet
and good, and either would worship you meekly and mildly as a god
and a hero; besides which they have other and more substantial
advantages, and you would have the satisfaction of cutting out many
better men.”
“You are very cheeky this evening.”
“Do you know I used to think you rather admired Charlotte?”
“Admired her! How can one help admiring them both? Only they
are such a perfect match that one couldn’t love, honour, and obey—
that’s it, isn’t it?—the one without loving, honouring, and obeying the
other.”
“That’s an evasion,” said Ella, piercing him with her brown, bead-
like eyes. She continued to look at him fixedly while she counted
slowly on her fingers. “One—two—three—three weeks ago you were
not in the same mind.”
Lauriston started and grew red, and the brown eyes twinkled.
“Three weeks ago, if my uncle had made you this suggestion, you
would have taken it differently.”
“What do you mean?”
“That something has happened in the meantime to divert your
admiration into another channel. Oh, I know. I am not a ‘silent
member’ for nothing; when I am called upon to give my vote, my
mind is a good deal clearer on the subject in hand than those of the
active debaters.”
“Well, supposing I told you I wanted to marry you?”
“You would not dare to come to me with such a story.”
“Why not? You like me; you have always shown it. You are nicer to
me than you are to almost anybody.”
“I like you certainly, though I think at present you’re rather a prig;
but perhaps that is only because it is a case of sour grapes.”
“Sour grapes!”
“Yes. For if I had been handsome I would have married you; I like
you enough for that.”
“Then why in heaven’s name won’t you marry me?” asked
Lauriston, much excited.
“Simply because you would take me to avoid something worse;
and that I have no attractions strong enough to keep you if the
‘something worse’ should try to get hold of you again.”
Lauriston was amazed and shocked at this penetration on the part
of a young girl. He gave her a shy look out of the corners of his eyes,
and leaned forward on his knees, his handsome brown head bent,
playing with his moustache with moist, nervous fingers. She laughed
as she looked at him, with a sound in her voice which struck him,
though he could not quite make up his mind whether it was tender or
bitter.
“I have some astonishing notions for a girl, haven’t I?” she said
quietly. “But after all it is not so very surprising if you will consider the
facts a little. Here am I, a girl too plain, too unattractive to be
worshipped like my sisters, too proud to be married for the only
attraction I share with them, and not at all inclined to do homage to a
sex that prefers a beautiful wax dolly to—well, to a faithful and
intelligent dog.” There was no mistaking the bitterness of her tone
now, while the half resentful, half plaintive expression of her eyes
made her face at least interesting. “So I have had to carve out a life
for myself, with peculiar pleasures and peculiar interests. I read and I
study to an extent which would almost disgust you perhaps; and I
watch, and listen, and think until I know as much of life and of the
people I meet as Charlotte and Cicely know of their ‘points’ and the
colours which suit their complexions.”
“I shall begin to be afraid of you,” said George.
“Why?” asked Ella, folding her hands and sitting up stiff and
straight as a school-teacher. There was a jardinière full of pretty
flowering plants near the ottoman on which they were sitting.
Charlotte or Cicely would have taken the opportunity to lean forward
and play with or gather some of the blossoms, to show off their figure
and the pretty curves of their wrists. But Ella, when she chose to talk,
always became too much interested in her subject to have thought
for petty coquetries, and so she sat, with the calm intent face of a
judge, prepared to give an impartial, yet kindly, hearing to George’s
answer.
“Because you are so clever.”
“And so are you. But even if you were not, you would have no
need to be afraid of me. It would be as reasonable of me to be afraid
of you, because I know that if you liked you are strong enough to kill
me with one blow of your fist, as for you to think I would use my wits
to do you harm. One does not turn one’s strength against one’s
friends.”
“That is true,” said George, touched by the girl’s tone. “Ella, why
won’t you marry me? Only two women in all my life have ever woke
any strong feeling in me: until this evening I could have said ‘only
one’—a little wild girl whose influence I dread, though I have only
met her twice. You will think me a weak fool, perhaps, but a woman,
however clever she may be, cannot in such a case judge a man.
There are influences at work in a man’s coarser nature that no sweet
and innocent girl could understand. To-night you have given me the
first glimpse I have ever been able to catch into the depths of your
warm heart and your noble mind; I see in you the type of all that is
best in women; and I know that if you would have me all that is best
in me would grow and expand until I might in time be worthy of the
affection of a good woman. Ella, will you try me?”
The girl was looking away from him, still sitting very upright, and
drinking in his words with an intent expression on her face. At last
she turned her head slowly, and her eyes, mournful and earnest,
gazed full into those of the young man, who had poured out his
appeal with passionate excitement, and now sat, flushed and eager,
awaiting her answer.
“Can you wait for my reply till to-morrow?” she asked, with a
curiously searching expression.
“Why to-morrow? What would you know to-morrow that you don’t
know to-night?”
“You are going to see the girl to-night!” said Ella, with a sudden
inspiration.
“If you will not have me—yes. It is a promise. If you, now that you
know everything, will take me, I hold myself absolved from a promise
to another woman, and before Heaven I swear that you will have
nothing more to fear; I will never see her again. Only a woman can
drive another woman out of a man’s head. Ella, no one has ever
crept so near to my heart as you. Will you come right in?”
If she had not cared for him so much, she would have said yes.
But the tenderness she had long secretly felt, without owning it to
herself, for the handsome young officer, made her timid. If she were
to marry him, she, with the fierce depths of unsuspected passion she
felt stirring at her heart, would adore him, would be at his mercy,
bereft of the shield of sarcasm and reserve with which she could
hide her weakness now. She knew that the feeling which brought
him to her was not so strong as, though it was probably better than,
that which impelled him away. She dared not risk so much on a
single stroke. Yearning, doubt, fear, resolution, all passed so quickly
through her mind that she had kept him waiting for his reply very few
moments when she rose, and with a face as still and set as if she
had not for a moment wavered, she said:
“I can give you no answer now. If you are in the same mind a
month hence, ask me again.”
George gave a hard laugh as he too rose.
“It will be too late,” he said coldly. “But I thank you for hearing me.
Good-night.”
He shook hands with her in a mechanical manner, not even
noticing in his agitation the nervous pressure of her fingers. If he had
looked again in her face he would have seen that she relented; as it
was, he was at the other end of the room taking leave of her father
and mother before she had time to realise the decisiveness of the
step she had taken. Scourging herself with reproaches, remorseful,
miserable, Ella Millard got little sleep that night.
George Lauriston had hardly got half-a-dozen yards from the
house when he heard Lord Florencecourt’s short, youthful step
behind him, and a moment later the Colonel had slipped his arm
through his, with a friendliness he showed to no one but his
favourite.
“Well, George, which of the two is it?” he asked in a much more
genial tone than usual.
“Which of the two!” repeated Lauriston vaguely.
“Yes, yes, you were talking to the sister all the evening; now there
is only one subject which makes a young man so utterly oblivious of
everything else. Come, you can confess to me; which of her two
sisters were you trying to get her influence with?”
“I was trying to get her influence with Ella Millard.”
The Colonel stopped, pulled the young man face to face with him
by a sharp wrench of the arm, and looked up into his face with his
most steely expression.
“Are you serious?” he asked in a grating voice.
“Most serious, I assure you, sir.”
“You asked that yellow-skinned, swarthy little girl to marry you?”
“I think, Colonel, the most important thing about a wife is not the
colour of her skin.”
“There you’re wrong, entirely wrong. Your fair white woman may
be cold, may be irritating, she may henpeck you by day, she may

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Successful Project Management 7th

Edition Gido Solutions Manual

Successful Project Management 7th Edition Gido Test

Successful Project Management 6th Edition Gido

Successful Project Management 6th Edition Gido Test

Project Management The Managerial Process 7th Edition

Contemporary Project Management 2nd Edition Kloppenborg

Contemporary Project Management 4th Edition Kloppenborg

Project Management The Managerial Process 7th Edition

Information Technology Project Management 7th Edition

CHAPTER 7: DETERMINING COSTS, BUDGET, AND EARNED VALUE ..............1

Based upon this chapter, students will become familiar with

Project Management Knowledge Areas from PMBOK® Guide

1. Real-World Project Management Examples

o Smaller demonstration projects related to tidal stream and tidal barrage

2. Estimate Activity Costs

3. Determine Project Budget

A. Aggregate Total Budgeted Cost

B. Develop Cumulative Budgeted Cost

4. Determine Actual Cost

C. Compare Actual Cost To Budgeted Cost

5. Determine Value of Work Performed

6. Analyze Cost Performance

A. Cost Performance Index

o CPI = $54,000/$68,000 = 0.79

7. Estimate Cost at Completion

 TCPI = (TBC – CEV)/(TBC – CAC)

9. Manage Cash Flow

o Provide a down payment at the start of the project.

10. Cost Estimating for Information Systems Development

An IS Example: Internet Applications Development for ABC Office Designs

11. Project Management Information Systems

12. Critical Success Factors

• TBC: total budgeted cost

• CV: cost variance = CEV – CAC

Project managers should focus on:

Method 2 – Perform the remainder of the work according to budget.

Case Study #1 A Not-For-Profit Medical Research Center

Case Study #2 The Wedding

Optional Supplemental Activities

Appendix #1 - Time–Cost Trade-Off

• Figure 7.14 depicts a network diagram for a project with

Appendix #2 - Microsoft Project

Figure 7A.1 depicts the Resource Sheet with Work

Figure 7A.6 depicts the Task Usage Sheet Assignment

Figure 7A.7 depicts the depicts the Change in Status Date. To

Figure 7A.13 depicts the Resource Sheet with

Figure 7A.14 depicts Change of Percent Complete for Material

Figure 7A.15 depicts the update of the actual costs of the

Figure 7A.17 depicts the Visual Reports–Create Report Window to

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