Saturday, May 28, 2011

My back of the envelope analysis of why it makes Sense AND Cents to take AP classes and the AP tests seriously. By my count it is costing you AT THE MINIMUM $25,000 by not doing so! YES, that number is right...See my calculations...

How much is NOT taking AP classes and AP Tests costing you in REAL dollars? The calculation below will give you an idea of how much it costs you to forgo the rigor of Advanced Placement classes.  It is difficult to account for all costs, explicit or implicit.  I believe the bottom line number I arrive at is a LOW figure because of the particular number I use for tuition, room and board.  Read it and let me know of any other "opportunity costs" I have left out that will either INCREASE the difference or DECREASE it.  I am open to revision of these numbers...

Here is my step by step analysis of why you SHOULD take AP classes and the AP test in those subjects:

Skip AP classes in High School---Go directly to college

1. Go to college and take 5 classes, which equals 15 credit hours towards a degree.

2. Estimated  cost of attending a Public University in Texas  $8,000 (room, board, tuition, books,etc) to take 15 credit hours. This is an UNDER ESTIMATION!

3. To put this in perspective, if you had a job earning $8.00 per hour (net after taxes) you would have to work 1,000 hours to earn the money to pay a semesters tuition.  This is probably an OVER ESTIMATION or your net hourly wage.

4. 1000 hours/40 per week = 25 weeks of work (almost 6 months) to earn the money to attend college for 1 semester!!

5.  This assumes ALL your earnings went to pay for college and nothing else.

6. If you have to pay living expenses out of your paycheck, you may have to take out a loan, so add that to the cost of a semester. For simplicity, we will leave that out of the equation.

7. Your total cost for a semester of college for our purposes is $8,000,  and most likely more.

Now assume you took AP classes in High School.

1. Take 5 AP classes in High School. Take 5 AP tests and get a score that your college will take for credit

2. Each AP test costs $56

3. Total cost for AP tests $280.00

4. Assume you study an extra 10 hours a week for AP classes relative to non-AP classes.  We have 36 weeks of school  X  10  hours per week = 360 hours of extra study time

5. Assume we account for the money you “lost” by not working and studying instead---$8.00/hr X 360 = $2,800 (your opportunity cost of not working)

Lets total up what we have so far.

Your total cost of a semester of college WITHOUT AP tests= $8,000

WITH AP tests =$3,080 ($280 AP tests + $2,800 forgone wages)

The difference/savings =$4,920 WITH AP CREDIT

ALSO—you took care of a semester of college while still in high school (where you have to be ANYWAY). You can finish college a semester earlier than normal. You can get a full time job after getting your degree. Assume you get a job paying $40,000 per year (depending on your degree, add some (or a lot) or subtract some. That extra semester in college is costing you about $20,000 in income!! You have to add that into the above calculations.

Lost income by attending an extra semester of college = $20,000

The Total Cost of NOT getting 15 hours (1 Semester) of AP credit = $24,920


A couple of informative graphics on Oil Production and the revival of the Texas oil boom years...WTF! (With The Fracking)...What did you think I meant?

According to the graphic below, countries that are classified as democratic (relatively "free") produce about 16% (US 9%, Canada 4%, Norway 3%) of the world's output of crude oil. Collectively, countries deemed less democratic produce about 54% (rough estimate just eye-balling the graph).

Source: Bloomberg (HT: Carpe Diem)
 Here is a chart showing the country of origin for US imports of crude oil. Several of the same names appear on both illustrations. 

Source: EIA
 I do find it interesting that China is a big producer of oil in the marketplace BUT the US imports virtually no oil from them (only about 2,000 barrels a month according to the IEA).

According to the NYTIMES , in short order, the US could increase  production by 25%, moving the US from 9% to approx 11.25% of world production.
"The Texas field, known as the Eagle Ford, is just one of about 20 new onshore oil fields that advocates say could collectively increase the nation’s oil output by 25 percent within a decade — without the dangers of drilling in the deep waters of the Gulf of Mexico or the delicate coastal areas off Alaska. More than a dozen companies plan to drill up to 3,000 wells there in the next 12 months."
However, this would require "drill baby drill" and all the negatives that brings with it..

""There is only one catch: the oil from the Eagle Ford and similar fields of tightly packed rock can be extracted only by using hydraulic fracturing, a method that uses a high-pressure mix of water, sand and hazardous chemicals to blast through the rocks to release the oil inside.

The technique, also called fracking, has been widely used in the last decade to unlock vast new fields of natural gas, but drillers only recently figured out how to release large quantities of oil, which flows less easily through rock than gas. As evidence mounts that fracking poses risks to water supplies, the federal government and regulators in various states are considering tighter regulations on it.""
That is the bad news.  The good news is that it could bring prosperity to local and state governments...
"...The companies estimate that the boom will create more than two million new jobs, directly or indirectly, and bring tens of billions of dollars to the states where the fields are located, which include traditional oil sites like Texas and Oklahoma, industrial stalwarts like Ohio and Michigan and even farm states like Kansas..."
Opportunity Costs abound! What do states with declining revenues and high unemployment do?  How do local communities balance the need for more local revenue AND retain/maintain their quality of life? 


HT: Carpe Diem---How could I live without this blogger!! :)

Sunday, May 22, 2011

Netflix customers collectively consume 30% of US bandwidth. Shouldn't they pay MUCH more for video stream?? See chart here...

I am very ignorant of how the "guts" of information technology works. Sort of like my car--I don't know HOW it works, I just want to turn the key and go.  Is the supply of bandwidth equal to the demand for it? Is supply greater than demand or can the supply be expanded with little extra cost? If I am not mistaken, this is one of the issues with net neutrality.  Can someone give me a middle-school intelligence level explanation of why I should not pay more for my Netflix subscription than I do...   
Source: Business Insider

""Netflix's streaming service is so popular that it's now consuming 30% of peak downstream internet bandwidth in North America, according to data from Sandvine, a broadband equipment company, via TechCrunch.""
View My Stats