The Project to Reduce Illiteracy in Young Adults A Systems Approach Feasibility Study Presented by SG-1 Consultants December 2,2012

The Project to Reduce Illiteracy An educational company forwarded to SG-1 Consultants the request of an anonymous developing country’s government for an educational project to reduce illiteracy in its young adult population. The country has installed electricity and Internet to support the project. The U.S. Agency for International Development (USAID) will fund a U.S contractor to develop and deploy this project and has requested a proposal from SG1 Consultants.

The Project to Reduce Illiteracy  The project will be a 6-year computer-based course  Each registered student will be required to provide their own computer  CDs will distribute course content and assessments  A maximum of 200 students will be accepted each year year

The Project to Reduce Illiteracy The following feasibility study by SG-1 Consulting uses a systems approach and covers:  Course Management  Course Materials  Course Assessments  Student Support

The Project to Reduce Illiteracy The systems approach expense breakdown:  Development and production costs  Maintenance costs of software  Annual presentation costs per student

The Project to Reduce Illiteracy Development and Production Costs Course Management/Overheads: Needed for 18 months Course 35 % of $72,000/annum 30% of $24,600/annum Total Fixed Cost $48,870.00

The Project to Reduce Illiteracy Development and Production Costs Software Development: Authoring $81, Software copyright $ _________ Total Fixed Cost $81,500.00

The Project to Reduce Illiteracy Development and Production Costs Printed Material Development: Authoring software manual $1, Editing/Designing software manual $1, Software manual copyright $ ________ Total Fixed Cost $2,250.00

The Project to Reduce Illiteracy Development and Production Costs CD Production: Production development $5, Authoring assignments (included) $ 0.00 ________ Total Fixed Cost$5,000.00

The Project to Reduce Illiteracy Development and Production Costs SUMMARY Total Cost of Course Management $48, Total Cost of Software Development $81, Total Cost of Printed Material Development $ 2, Total Cost of CD Development $ 5, Total Fixed Cost of Development $137,720.00

The Project to Reduce Illiteracy Maintenance Costs of Software Authoring $60.00/hr $ 42, Editing/Designing Software Manual $ 1, Production of CD $ 5, Total fixed costs of maintenance $48,000.00

The Project to Reduce Illiteracy TOTAL FIXED COSTS SUMMARY Total fixed costs of development $137, Total fixed costs of maintenance $ 48, Total Fixed Costs $185,720.00

The Project to Reduce Illiteracy Annual Presentation Costs Student Support - consists of a tutor to be paid hourly for each group of 25 students Assignment markings $95.00 $ (variable cost) Tutor (per 25 students) $ 8.00 (semi-variable cost) Tutor expenses $ 2.00 (semi-variable cost) Total variable costs $ Total semi-variable costs $ Total Costs Student Support $295.00

The Project to Reduce Illiteracy Annual Presentation Costs Replication and Distribution of student materials (rate is per item) Production of study guides $10.00 Production of CD $12.00 Packaging/Postage $10.00 ______ Total Fixed Cost $32.00

The Project to Reduce Illiteracy TOTAL VARIABLE COSTS SUMMARY Total Student Support Costs $ Total Replication/Distribution Cost $ Total Variable Costs Per Student $327.00

The Project to Reduce Illiteracy Calculations Annualization was based on the requested 6 year course life. Annualization of Fixed Maintenance Input rrate7.5% Input nyears2 Input Camount 48,000 (1+r) n (Intermediate value) a(r,n)Annualization factor Result C*a(r.n)Annualized amount 26,733

The Project to Reduce Illiteracy Average Cost Per Student

The Project to Reduce Illiteracy Break Even Point As documented in the handout (Excel File) and shown in the table below, with tuition at $ per student, the project will show a profit in Year 3. This will create a break even point at 542 students. Year Income150,000300,000450,000600,000750,000900,000 Profit-144,780-60,18024,420109,020193,620278,220 Break Even Point 542

The Project to Reduce Illiteracy Cost & Income for Break Even Point

The Project to Reduce Illiteracy Acknowledgment The SG-1 Consultants who prepared this study are:  Kabir Armand Bankole  Theresa Eugenia Callahan  Sandra K Haggerty  Paul Kemp