EGR403 GROUP PRESENTATION Public Vs. Private Schooling

Group 8 Christopher Bolton Techie Natalie Chaidez Summarizer Bradley Lambrecht Summarizer Michael Wuethrich Organizer

Scenarios: Personal Investment A high school graduate wants to get an engineering degree and is deciding where to go to college. Will a public university such as Cal Poly Pomona or a private university such as CalTech be more beneficial in the long run (at retirement)? Scenario 1Vs.Scenario 2 Public SchoolVs.Private School

Scenarios Cal Poly Pomona  Travels to school 3 times a week  Works full time 4 days a week  Graduates in 5 years with no loans CalTech  Travels to school 4 times a week  Works part time 2 days a week  Graduates in 5 years with excessive loans

Statistics  Cal Poly Pomona:  Average cost for school per year (tuition, books, parking, etc.) : $6,  Automotive Expenses: $10,  Average entry level salary: $67,500/year  Loan at graduation: $0  CalTech:  Average cost for school per year (tuition, books, parking, etc.): $33,509  Automotive Expenses: $9,  Average entry level salary: $83,500/year  Loan at graduation (considering interest) : $244,693.05

Sensitivity Analysis – Cal Poly  Cal Poly Pomona:  Starting Salary vs. Savings Gradient  Years Worked With Company vs. Savings Gradient  Years Until Retirement vs. Savings Gradient

Sensitivity Analysis – CalTech  CalTech:  Starting Salary vs. Savings Gradient  Years Worked With Company vs. Savings Gradient  Years Until Retirement vs. Savings Gradient

Sensitivity Analysis Conclusion  The CalTech graduate wins in the area of savings gradient/quality of living due to having a higher starting salary at the same annual percent raise, which offsets the loan.  The last sensitivity analysis will be used to determine the conditions that the Cal Poly graduate would have to meet in order to achieve a similar savings gradient/quality of living as the CalTech graduate.

And the winner is… CalTech  Regardless of high loans, the higher starting salary will pay off in the long run.

Sensitivity Analysis Comparison  The Cal Poly graduate would achieve a similar gradient if:  He/she worked an extra 5 years or more.  He/she invested a much higher percent in riskier rate of returns in his portfolio. Ex: 50% in emerging market with 14% ROR.  He/she somehow negotiated a higher starting salary. Years Worked vs. Savings Gradient Years WorkedSavings Gradient

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