Effect of Need Based Grand Eligibility on College Attainment

Effect of Need Based Grand Eligibility on College Attainment The education system in the United State is considered as the best in the world , but this status is started to fall. According to the OECD report(2012) it has been seen that the bachelors degree attainment rate rise substantially in other countries over the last couple of decades, but the trends in the US are move slightly. Educational researchers such as Turner(2004),Bound, Lovenheim Turner( 2007) showed that students who admitted in bachelor degree program take more time to complete it. The national educational statistics also indicate a considerable variation in graduation time at the state level. Statistics from the 2009 census indicate that roughly 17 percent of those born in the lowest-ranked state of Southeast of US (age 25 and older) had attained a bachelor’s degree which is below the national rate of 24 percent, and compared to the U.S. average from the late 1970s(Goal 2025,2014). According to Bailey and Dynarski ( 2011) only 18 percent of college entrant complete a bachelor degree within four years and 36 percent within six years. In the past, educators and researchers tried to find out the reasons why so many college entrants fail to complete a degree, or fail to complete on time. Previous researchers such as Clayton(2009) argued that students financial constraints and academic preparation and motivation are correlated with time to complete a degree. Baum, Ma, Payea (2010) showed that only 55 percent students of low income quintile background who graduated high school in 2008enrolled in college compared with 80 percent of students in the highest income quintile. Ellwood Kane(2000) proved that low-income students have a lower probability of enrollment than do more affluent students when controlling for academic achievement. The gaps in college degree attainment by socioeconomic status are even more concerned (Haveman Smeeding, 2006). These concerns may explain the increasing popularity of programs offering large financial incentives for co llege achievement. The United States government currently provides more than $132 billion per year need based financial assistantships to mitigate the effect of rising college costs on the postsecondary decisions of students from low-income families (Baum and Payea 2011).The largest of these grants is the federal Pell Grant, a need-based grant awarded to low- and moderate-income students pursuing a college education at an accredited institution. Researchers always wanted to know whether these grants lead to improvements in students’ college outcomes. A vast majority of research examined the causal effect of need-based grants on college access. However, a very little research has examined the effect of need-based grants on whether students persistent, accumulate more college credits, and ultimately complete a degree. The proposed study will investigate the effects of need-based grant eligibility on college attainment. Specifically, we will focus on the impact of eligibility fo r the need-based Mississippi Tuition Assistant Grant(MTAG) on whether students enter, remain enrolled in, and graduate from college. The Mississippi Postsecondary Education Financial Assistance Board(MPEFAB) determined eligibility for the MTAG using the federal need based financial analysis calculation. According to that calculation freshman and sophomore students will get not more than $ 500 per academic year and in case of junior and senior students, the award shall not exceed $ 1000 per academic year. According to the MPEFAB, students who get less than the full Federal Pell Grant award shall receive an MTAG award in an amount equal to the difference between the maximum Federal Pell Grant award amount and the award amount of the Federal Pell Grant for which the student is eligible based upon the student’s EFC as determined by the FAFSA. A student may receive MTAG in addition to the Mississippi Eminent Scholars Grant (MESG), unless the institution determines that receipt of both awards will cause the student’s financial aid package to exceed the institution’s established cost of attendance for the student. Problem Statement Previous researches related to financial aid highlighted the effect of financial aid on college attendance and college persistence, even though this two likely represent very different sets of decisions for individuals. Researchers always wanted to know whether these grants lead to improvements in students’ college outcomes. A vast majority of research examined the causal effect of need-based grants on college access. For instance, Deming Dynarski (2009 ) showed that for each additional $1,000 need-based grant eligibility can have a strong and positive effect on students enrollment in college, with the estimated probability of enrollment increasing by between 3 to 4 percentage on average. Several researchers such as Bruce and Carruthers(2011),Dynarksi(2008), Scott-Clayton(2011) examined the long-term effect of merit-based scholarships on whether students earn a degree. Recently, Bettinger, et al. (2012) suggested that helping students to apply for federal aid like the Pell Gr ant increase college persistence. However, a very little research has examined the effect of need-based grants on whether students persistent, accumulate more college credits, and ultimately complete a degree. Research Question The proposed study will investigate the effects of need-based grant eligibility on college attainment. Specifically, we will focus on the impact of eligibility for the need-based Tennessee Student Assistance Award Program (TSAA)on whether students enter, remain enrolled in, and graduate from college. As such, we will contribute to the literature by focusing on the longer-term effects of need-based financial aid. The proposed study will also contributes to the scant literature on the effects of financial aid, particularly need-based aid, on college persistence and degree completion. Additionally, the proposed study will examine the effects of increasing the size other need-based financial aid for example, the Pell Grant on college outcome as well as interaction between need based financial aid and merit based financial aid. A regression -discontinuity design will be used based on the information that determined whether students were eligible for more, or less, need-based grant aid to analyze the causal effect of TSAA eligibility on whether students entered, persisted in, and completed college level degree program. Literature Review Previous research shows that financial aid may influence the college-going decisions of low income students. According to Becker(1964), if the perceived present discounted value (PDV) of the benefits of higher education exceeds the PDV of the costs of going to college the students pursue a college education. Thus, government and other aid granting agencies provide financial aid to reduce the PDV of the cost of going to college. Previous research related to financial aid support this theory. Dynarski (2003) and Deming and Dynarski( 2009) showed that reduction in financial aid by $ 1000 led to roughly 4 % reduction in college enrollment. The research literature suggests that financial aid can impact initial college enrollment positively, while economic theory is reluctant about the effect of financial aid on success of college student. Is is well proved that financial aid have an indirect positive effect on academic success for students who have already admitted in college. In recent y ears, authors such as Dynarski (2008) analyzed the effect of government sponsored merit based scholarship programs on students long term success. Dynarski(2008) showed that the introduction of state merit scholarships in Arkansas and Georgia increase degree completion rate in each state. While,Scott-Clayton (2011) found that students who got West Virginia PROMISE scholarship were 6.7 percentage more likely to earn a bachelor’s degree within four years than other students. Similarly, Bruce and Carruthers (2011) exploited a cut-off in the ACT score that determines eligibility for Tennessee’s HOPE merit scholarship to examine the effect of the grant on students’ longer-term college attainment. In contrast to Dynarski (2008) and Scott-Clayton (2011), the authors found little evidence that Tennessee HOPE had a positive impact on whether students earned a degree.

Case 20 : Aurora Textile Company

Case 20: Aurora Textile Company GROUP QUESTIONS Learning Objectives: 1. The basics of incremental-cash-flow analysis: identifying the cash flows relevant to a capital-investment decision 2. The construction of a side-by-side discounted-cash-flow analysis for a replacement decision 3. How to adapt the NPV decision rule to a troubled industry 4. The recognition that a reduced investment horizon is a significant consequence of financial distress 5. The importance of sensitivity analysis to a capital-investment decision Case Questions 1. How has Aurora Textile performed over the past four years?Be prepared to provide financial ratios that present a clear picture of Aurora’s financial condition. From 1999 through 2002, the financial performance of Aurora was unattractive and disheartening. This could be attributed to the business risks that arose from the intense competition that characterizes the industry in which Aurora operates. Absent an industry benchmark or comparable with wh ich to gauge the performance of Aurora, we utilized a trend analysis of the period 1999 through 2002. With 1999 as a reference point, we noticed that all measures of profitability have worsened.On a cumulative annual basis, net sales have been declining by 15%, while profit margins and ROA were always in the negative (see exhibit 1). While raw material cost as a percentage of net sales have been declining, the cost of conversion is escalating and affecting the bottom-line (see exhibit 1). It is obvious that Aurora needs to manage its expenses to generate profits from sales. While on the surface, the liquidity measures have improved (see exhibit 1), it is doubtful that the company has the ability to meet its current obligations with just cash and cash equivalents on hand.This is partially due to the fact that many of the firm’s current assets are predominantly account receivables and inventories. While it is true that the firm, its competitors, and the industry are continuing to lose money, an effective cost-control strategy – i. e. a strategy that improves profit margins, reduces operating costs, and appropriately manages inventory and account receivables will be crucial for Aurora to remain sustainable. 2. List the factors affecting the textile industry. What do you think is the state of the industry in the United States?How should you incorporate the state of the textile industry into your analysis? Why should anyone invest money in the industry? 3. What are the relevant cash flows for the Zinser investment? Using a 10% WACC and assuming a 36% tax rate, what do you get as the NPV for the project? What are the value drivers in your analysis? What do you estimate as the cost per pound for customer returns under the Zinser alternative? (Hint: for a replacement decision, analysts often find it helpful to prepare two sets of cash flows and two NPVs—one for the status quo and one for the new machine. Status Quo In the first year of the project , we calculated net sales assuming the current 500,000 pounds per week production level at a $1. 0235 selling price per pound (52-week year). After the first 3 year, we assume sales will grow by 2% in volume and 1% in price. Material and conversion costs will not change, but will increase at a pace of 1%. SG&A costs are equal to 7% of net sales so will adjust accordingly. Change in inventory is cash spent so it should be considered when calculating cash flows.In our analysis we calculated inventory by dividing COGS by the number of days in a year and then multiplying by the number of days of inventory held, 30 days in the status quo scenario. The current equipment will be depreciated using the straight-line method with zero salvage value. The current book value of the machine is $800,000 and the depreciation expense is $200,000 for the next four years. Using these assumptions, keeping all else constant, in a 10-year horizon the NPV of the Hunter Plant is about $8. 1 million (see exh ibit 2). New Project – Invest in Zinser Machine Aurora Textile Company also has the option of investing in a new Zinser machine for the Hunter Plant. The main difference between investing in the Zinser machine and maintaining the status quo is an initial investment of $8. 25 million and the receipt of $608,000 in after-tax sales proceeds from selling the existing machine. Additionally, there is an initial $50,000 ($32,000 after-tax) cost for training employees, but this cost is only incurred once (see exhibit 3).In their first year using the Zinser machine there will be a 5% decrease in sales volume, but selling price will increase 10%. Material costs per pound will be the same as the status quo, but conversion costs will decrease to $0. 4077 per pound per year due to lower power, maintenance and return costs. Days of inventory held will also drop to about 20 days. All other assumptions are the same as the status quo. In this scenario, the NPV of the Hunter Plant is about $15 . 87million if Aurora invests in the new Zisner machine (see exhibit 3). Incremental Cash Flows – The Net Effect of the New ProjectWhen looking at the incremental cash flows for the new project, replacing the old machine with the Zinser machine is a good investment. The NPV of the investment is $6. 33 million and the IRR is 28%, much higher than the 10% hurdle rate (see exhibit 4). While all the assumptions made could affect the NPV of the project, the major concern that could erode the value of the project is whether Aurora can survive for 10 years. In our early termination analysis (see exhibit 5), if we ignore the salvage value the time horizon breakeven point of incremental NPV is between 4 and 5 years, about 4. years. However, even if Aurora shuts down, the earlier they terminate, the higher the salvage value of the Zinser machine will be. Therefore, the time period to breakeven might be less than 4 years. If the Zinser machine can be sold for its 50% book value at early termination, it only needs 2 years for the project to add value to the Aurora Textile Company. 4. How sensitive is the economic life of the Zinser investment to its value to investors? In other words, if the company survives the entire 10 years, what is the NPV of the project?What if the company can survive only four years, what is the NPV of the project? For our sensitivity analysis, the main things we focused on were production levels and price. Here is a chart representing the IRRs for certain production levels and prices. Our production level estimates were based on the fact that we don’t know how the market will react with increased foreign competition. The textile growth rate we used for our most likely model is the domestic rate of growth, not the world growth rate.We don’t know if letting foreign competitors into the market would significantly shift the industry out of America or if it will keep a constant growth (at 2%). Our price estimates were based on the new WTO mandate that is going into effect in 2005. With the tariffs and quotas on the textile industry being lifted, there will be a significant growth in the amount of textile goods imported into America. Even though the cost may be high to transport these goods into the states 5. What would be your recommendation to the Board of Directors?Specifically would it be better to invest in the Zinser or to pay a dividend to the shareholders. Be sure to explain the primary reasons that justify your recommended course of action. The U. S. textile industry is going through a tumultuous time, and most companies are experiencing losses. Therefore, it would seem like an odd time to invest more money into the company. However, as the industry evolves Aurora Textile Company needs to innovate to stay competitive. The industry is moving toward demand for a higher quality product, and Aurora cannot afford to fall behind.The Zinser machine will help Aurora meet this demand. If the project were accep ted, the Zinser machine would replace the current machine in the Hunter Plant. Because the other three Aurora plants would not be affected by this decision, we compared the cash flows of only the Hunter plant with the new machine and without. The NPV of the Hunter Plant is about $15. 86 million if Aurora invests in the Zisner machine, and only $8. 91 million without the investment. In addition, when looking at the incremental cash flows of the investment, the NPV is $6. 6 million and the IRR is 28%, much higher than the 10% hurdle rate. Taking all of this into consideration Aurora should invest in the project. In addition to accepting this project, falling spot prices for cotton could be beneficial to Aurora Textile Company in the future. However, the company also needs to implement other strategies to improve their profit margins, including reducing operating costs and appropriately managing inventory and account receivables. These changes will help Aurora move in the right directi on to ensure that they are not forced to shut down operations in the foreseeable future

Lesson Plan Label Sentences with Parts of Speech

Knowing parts of speech well can help learners improve their understanding of almost every aspect of English learning. For example, understanding which part of speech is expected in sentence structures can help learners better understand new words through contextual clues when reading. In pronunciation, understanding the parts of speech will help students with stress and intonation. At lower levels, understanding parts of speech can help a lot with understanding basic sentence structure. This base will serve students well as they improve their English skills, adding new vocabulary and, eventually, more complex structures. This lesson plan focuses on helping beginning level classes develop a strong grasp of four parts of speech: nouns, verbs, adjectives, and adverbs. Once students become familiar with common structural patterns using these four key parts of speech, they feel more confident as they begin to explore the different tenses. Lesson Characteristics Aim: Recognizing nouns, verbs, adjectives, and adverbsActivity: Group work creating lists, followed by sentence labelingLevel: Beginner Outline Ask students to name a number of objects in the classroom. Write these objects on the board in a column. Ask students what type of word (which part of speech) the words are. Generally, one student will know that they are nouns.Label the words as Nouns on the board.  Ask students what you are doing as you mimic a few actions such as writing, speaking, walking, etc. Write the base form of these verbs on the board.  Ask students what type of words these are. Write Verbs above the column.Show the students some pictures from magazines. Ask students to describe the pictures. Write these words on the board in another column. Ask students what type of words these are, write Adjectives above the column.Write Adverbs on the board and write down a few adverbs of frequency (sometimes, usually), as well as some basic adverbs such as slowly, quickly, etc.Go through each column and quickly explain what the words do: nouns are things, people, etc, verbs show actions, adjectives describe things a nd adverbs state how, when or where something is done.Ask students to divide into groups of three and categorize the below. Alternately, ask students to create a new list of 5 nouns, 5 verbs, 5 adjectives, and 5 adverbs.Go around the room helping groups with the categorization activity.Write a few simple sentences on the board.Examples:John is a student.John is good.John is a good student.Mary works in an office.Mary usually drives to work.The students are funny.The boys play football well.We often watch TV.As a class, call for students to label nouns, verbs, adjectives and adverbs in the simple sentences. I like to use colored markers for this exercise to highlight each part of speech to help students with recognition.  Point out that a simple sentence with a noun (John is a good student) can combine with a simple sentence using an adjective (John is good) to combine into one sentence: John is a good student.Spend time helping students understand where certain parts of speech are usually found. Example: Verbs are in the second position, nouns are in the first position or at the end of sentences, adverbs of frequency are placed before the verb, adjectives end simple sentences with to be.Ask students to write five of their own simple sentences.  Have students highlight their own sentences with noun, verb, adjective, and adverb. Desk Exercise Categorize the following words as nouns verbs, adjectives, or adverbs. happywalkexpensivepicturesoftlyrideboringpencilmagazinecookfunnysometimescupsadbuyoftenwatchcarefullycarnever