Enron Essay Example | Topics and Well Written Essays - 2000 words

Enron - Essay Example Within about 5 years of the emergence of the Internet and the Web, electricity consumption linked to this new phenomenon had surged to 8 percent of total consumption. Naturally enough, this caught the eye of the prosperous energy trader down in Houston. How could Enron play in this exciting new game (Jorion 2003, p. 6) In order for a firm to have a reasonable chance of success in the realm of the Internet, it needed to be able to control its risks. Well, this was something that Enron was in a very good position to do. In fact, very few companies in the 1990s were as well positioned as Enron to play in this game (or so it seemed). "What Enron has been about for a long time," said Jeff Skilling, then Enron's chief operating officer, "has been making and restructuring markets. If you look at the present phenomenon, the Internet, it also comes into existing markets and dramatically overhauls them. That's something we started doing in the mid-1980s. The Internet just gives us the juice to extend more products across more markets more quickly (Jorion 2003, p. 6)." In particular, Enron got interested in the exotic-sounding world of broadband, which is a catch-all term for high-speed access to the Internet through the use of fiber-optic cable. Broadband is little more than a data pipeline of great bandwidth, or carrying capacity. (Or more precisely, bandwidth "determines the speed at which data can flow through computer and communications systems without interference (Jorion 2003, p. 6)." Even at the time-even amid all the Internet hype and hoopla-people knew that the nascent broadband/ bandwidth industry was a dicey proposition. "The market will not be for the faint of heart or the ill-prepared," one observer commented. "Success will require careful consideration of the appropriate market entry strategy. Organizations must ask the tough questions, such as 'what's my appetite for risk' (Jorion 2003, p. 6)" Well, in Enron's case, the answer was "big appetite." In the spring of 1999, Enron created a company called Enron Communications, Inc., that soon changed its name to Enron Broadband Services (EBS). It began selling a standardized bandwidth product, effectively turning the elusive concept of bandwidth into a commodity (Jorion 2003, p. 6). WHAT WENT WRONG For a while, and especially from a particular perspective, it worked. That perspective, of course, was the price of a share of Enron stock. People loved the idea of Enron and the Internet converging. Within 9 months-that is, the period between year-end 1999 and September 2000- Enron's stock price soared. In fact, it more than doubled-from $44 to $90 (Jorion 2003, p. 6-7). For a group of ambitious and self-impressed executives-especially those with heavy stock options-stock-price fever is something like heroin addiction. It goes from being a nice-to-have to the be-all and end-all. And over time, you need more and more of the stuff to get those good feelings. (In fact, when you do not get the stuff, you start feeling bad.) Management got accustomed to a high and rising stock price-and so, by the way, did Wall Street (Jorion 2003, p. 7). When stock-price fever sets in, lots of other temptations begin

Meritocracy As An Ideology Sociology Essay

Meritocracy As An Ideology Sociology Essay Meritocracy can also refer to an idealised society where discrimination on the basis of race, nationality, gender, age, and other irrelevant characteristics is completely absent. Merit is the encompassing value, the basic and morally correct criterion for any and all social classifications, particularly in respect to socioeconomic standing and in public space. A notion, emphasising societal consensus on the means and processes of selection for particular roles through a system of sifting, sorting, and rewarding talent and ability, motivated by competition for qualifications that in turn structure access to wealth, prestige, and personal satisfaction. It is conceived as a repudiation of systems like aristocracy where individuals inherit their social status. A meritocracy resembles aristocracy in the classical sense of the term meaning rule by the best. What has happened over the centuries, however, is that aristocracy has become associated with hereditary privilege and a rigid class s ystem. Instead of this, a meritocracy promotes worthy individuals regardless of which social strata they happen to be born in and each individual has good fortune in proportion to the individuals deservingness (Rawls, 1999, Nozick 1974, Miller 1999). IQ tests primarily tap analytical, logic-based reasoning; and surely that kind of cognitive ability is related to performance in many job settings. But other kinds of cognitive ability are also related to performance and thus also represent merit. For instance: imagination, practical sense, and the ability to interpret others perspectives. By the same token, the effort component of Youngs formulation suggests that a number of personality factors may figure into a reasonable conception of merit. For example, being conscientious may enhance job performance. Of course, some individual traits and social skills may be rewarded because they reflect conformity to arbitrary group norms. It is not clear why the term merit should be identified so closely with mental ability as distinct from many other conditions and traits that improve the chances of social and economic success (Hauser et als, 2000, p. 203). David Miller (1996, 300) eluding on Walzer (1983) has indicated that a meritocracy is not only more stable but also more socially just if there are a number of socially recognised forms of merit: economic contribution would be one kind of merit, education and scholarship another, artistic achievement a third, public service yet another, and so forth. However these other conditions and traits do not contribute to a fair opportunity. In Rawls view, the correlation between ones social origins and ones outcome in life is zero in a meritocracy and as long as some form of the family exists in society fair opportunity cannot be achieved as (Rawls 1971, 64). The social context within which individuals grow up influences the achievements of equally competent persons. Success in the labour market is transmitted from parents to children, and the advantages of the children of successful parents go considerably beyond the benefits of the best education, wealth and genetic cognitive ability. Many of the criteria associated with individual talent and effort do not measure the individual in isolation but rather parallel the phenomena associated with aristocracy; what is called individual talent is actually a function of that individuals social position or opportunities gained by virtue of family and ancestry. Among these, for example, one might list ambition or drive, perseverance, responsibility, personal attractiveness, and physical or artistic skills or talents, along with access to social support and to favourable social and economic networks and resources. Access to education is partly defined by inheritance as much research has demonstrated (Bowles and Gintis, 2002; Bourdieu and Passeron 1990; Aschaffenburg and Maas 1997; Sacks, 2003; Ballantine 2001). Compiling evidence from other studies Herrnstein concludes that 80% of the differences in IQ among individuals is explained by inherited factors and 15% is explained by environmental factors (Herrnstein 1971, 171). Children from the upper class get upper class education, middle class children get middle class education, working class people get working class education, and poor people get poor education. Privileged young people can perceive reachable goals and develop lofty aspirations because they tend to benefit from high expectations and support networks from the fa mily and social milieu, as well as extensive economic and educational resources. Those who have the resources, via their parental background, will move through higher education, get well paid jobs, and postpone family plans until they are well into their thirties, building their financial and cultural capital significantly prior to family formation. Inheritance may provide access to powerful forms of social capital (who you know) and cultural capital (what you know). Bourdieu Passeron (1990) indicate that students who lack the required knowledge and skills with which to successfully navigate the parameters of middle class culture inevitably fail at school. It therefore seems that unequal educational opportunity is the driver of individual achievement. Research shows that as class rises so does the level of education. As a consequence, the expansion of higher education will broaden the gulf between rich and poor (Blanden et al. 2005). So achievement capacities are ascribed to social class. Thus, IQ tests measure intelligence as a reflection of inherent intellectual capacity combined with environmental influences. Thus parents can predispose their children to succeed or fail in life as they are a part of the environment that affect the abilities that children attain. Thus the first and foremost among non-merit factors is the effect of social class at birth on future life. Therefore truly equalizing childrens environments in an effort to create a system with equal opportunities for all would mean having to eliminate the family. Meritocracy thus could lead to a hereditary caste system that, far from promoting social mobility, actually makes social advancement nearly impossible for the lower orders. This could be the case if wealth and social position are or primarily distributed by unchangeable genetic characteristics of individuals. This argument can be reworked into the form of a Hernsteins syllogism: 1. If differences in mental abilities are inherited, and 2. If success requires those abilities, and 3. If earnings and prestige depend on success, 4. Then social standing (which reflects earnings and prestige) will be based to some extent on inherited differences among people. (Herrnstein 1971, 197-8) This implies that absolute equality of opportunity is an ideal that cannot be achieved. (Loury 1977, p. 176). For John Rawls, the question of distributive justice is rather different. He is not content to say that any person begins at some point in the process of acquisition and then is merely constrained by a set of rules and procedures to ensure fairness. Rather, the socioeconomic position of the agent is also considered. Rawls bases his query on how the agent is presented with the distribution of talents and social position. His conclusion is that these distributions are accidental and arbitrary. It is an accident that someone is born with whatever natural traits he may possess. The question is raised whether a meritocracy based on natural abilities is thus unfair. Some might contend, for example, that even if we do not deserve our natural abilities it is not unfair if we reap the rewards of those abilities because the system of reward is independent of the system of deserts. However, Rawls makes the case that social position is also random and arbitrary. The fact that natural abilities may or may not be rewarded in that society is an accident. To be rewarded based merely on an accident is not deserved. Thus, a meritocracy that is based on reward from undeserved social position is similarly unfair. Therefore, both natural abilities and social position may not be the basis of distributive justice because they are unfair. The naturally advantaged are not to gain merely because they are more gifted. The individual cannot help how she begins life. Why make her pay for her positive talents and advantages? The rectification of these disparities in Rawls is his difference principle that makes all inequalities subject to the stipulation that the least advantaged will benefit from them.

Legend that College Roommates Death Boosts GPA Essay -- Urban Legends

Dead Man's Curve--College Roommate's Death Boosts GPA Introduction and Background The legend I collected was one that I had heard before, although this version differed a little from the way I remember it. The storyteller was a 19 year-old male first year student at the University. He’s from Columbia, and his dad works in business while his mother is a homemaker. The telling of this story took place at the diner after we had finished eating: Well, my brother told me one his first summer back from attending University. He had heard the story one late night just before finals were supposed to begin. He was with a small group of friends and he had told him that he was worried about his grades. That was when a friend joked, â€Å"Well, if you’re desperate, you could kill your roommate.† The friend then elaborated that if his roommate died he magically would receive straight A’s for that semester. Context I had first heard of this legend when I saw movie on television called â€Å"Dead Man on Campus.† The film originally came out in the fall of 1998, but I had not seen it until 2003. I asked my subject if he had seen or heard of the movie. He told me that he had not. Although this legend may at first appear to be fairly straightforward, my research has shown that this legend exists in several forms. In the film version that I known, after hearing about a campus policy that gives a 4.0 to anyone if their roommate commits suicide, two freshman try to find a third roommate who is suicidal and push him over the edge. There are differences between the story I am familiar with and the story that was told to me by my subject. In my version, the death had to be a suicide while in my subject’s version any... .... The Vanishing Hitchhiker: American Urban Legends & Their Meanings. New York: W.W. Norton, 1981. Butcher, James N. "Assessment in Clinical Psychology: A Perspective on the Past, Present Challenges, and Future Prospects." Clinical Psychology: Science and Practice 13(3)(2006): 205-209. IMDb. 2007. The Internet Movie Database. 1 April 2007. http://www.imdb.com/. Mikkelson , Barbara. "Urban Legends Reference Pages: Grade Expectations." Urban Legends Reference Pages. 03 Mar 2007. Retrieved on 1 April 2007. http://www.snopes.com/college/admin/suicide.asp. Mortenson, Tom . "Suicide Among 15 to 24 Year Olds by Gender 1940 to 1998." Postsecondary Education OPPORTUNITY Number 132Jun 2003 01 April 2007. http://www.postsecondary.org/archives/previous/117302SUICIDE.pdf. Reisberg, Leo. "Hollywood Discovers an Apocryphal Legend." Chronicle of Higher Education (1998).

Capital Structure Essay

Capital structure is how a company finances its overall operations and growth by using funds from equity or debt (Investopedia, 2012). Of course, every company must determine its preference on its debt-to-equity ratio and determine which capital structure works best for them. Some approaches to analyzing capital structure are: 1.EBIT – EPS: This analyzes the impact of debt on earnings per share (EPS). Optimizing shareholder’s wealth is the optimum goal and therefore, this approach analyzes the high EPS based on an expected range of earnings before income taxes (EBIT). 2.Valuation: Determines impact of debt use on shareholder’s value by determining the level of debt at which the benefits of increased debt no longer outweigh the increased risks and expenses associated with financing (Wenk, 2012) 3.Cash Flow: Analyzes a firm’s debt capacity by using the weighted average of cost of capital (WACC). The WACC is a calculation of a firm’s cost of capital in which each capital source (bonds, stock and other long-term debt) are proportionally weighted to determine how much interest the company has to pay for every dollar it finances (Investopedia, 2012). Look more:  capital budgeting examples essay Part of Competition Bikes’ (CB) main consideration in the decision to merge or acquire Canadian Biking is working capital. Lets use the EBIT – EPS approach to determine how to maximize shareholder return while minimizing the cost of capital. We currently know Canadian Biking’s moderate sales forecast of EBIT figures for the next 5 years (Year 9 – 13), therefore we can apply the EBIT – EPS approach to choose an optimal capital structure. The total of capital sources in each of the 5 years is $600,000. We will use EBIT – EPS to determine which assortment of bonds*, preferred stock, and common stock is the best option to increase Canadian Biking’s EPS. The five alternative capital structures include: Option 1: 100% Bonds (fully financed) Option 2: 50% Preferred Stock & 50% Common Stock (no bonds) Option 3: 20% Bonds & 80% Common Stock Option 4: 40% Bonds & 60% Common Stock Option 5: 60% Bonds & 40% Common Stock *Annual bond interest rate is 9% After using the EBIT – EPS approach using the forecasted EBIT amounts for Years 9 through 13, we can average the EPS for each of the 5 years to determine which capital structure produced the highest EPS. The EPS averages computed for the capital structure options are: Option 1: Average EPS = .0452 Option 2: Average EPS = .0542 Option 3: Average EPS = .0526 Option 4: Average EPS = .051 Option 5: Average EPS = .0494 Based on the EBIT – EPS approach, the recommended capital structure is option 2, â€Å"50% preferred stock & 50% common stock†. This is the best capital structure mainly because there are two things to consider: 1) long-term debt and associated interest expense and, 2) equity and # of common shares. Option 2 is the best capital structure because there are no bonds and therefore, no interest expense. For example, if we look at option 1 in Year 9, and the bond interest is 9%, then the bond interest expense is $54,000 (.09*600,00). This lowers the income before taxes by $54,000. Although companies can finance debt and use the interest expense deduction to lower their taxable income, it doesn’t make sense for Canadian Bikes to fully finance their capital, because the interest expense costs outweigh the benefit of the tax deduction, resulting in a significant decrease in total income available for common stock. Additionally, because the capital structure consists of 300,000 shares of preferred stock, the company must pay dividends of 5%, reducing the company’s total income available for common stock by $15,000 (.05 * 300,000). Although this reduces the total income available for common stock, the company will maximize its EPS by only having 50% capital in common stock. This reduces the total number of common shares outstanding, which means less shares to divide the total income among. Therefore, Option 2 is the most optimal capital structure that considers minimizing long-term  debt expenses and the optimal number of common shares in order to maximize shareholder return. CAPITAL BUDGETING: Competition Bikes’ is considering building a manufacturing facility in a new Canadian location. The total investment for this project would be $600,000 USD. This consists of $400,000 to build the facility and an additional $200,000 in working capital to support operational costs. The company has projected cash flows over the next five years; therefore we can use cash flow budgeting methods such as net present value (NPV) and Internal Rate of Return (IRR) that consider time value of money for long-term investments (Pearson Education, Inc., 2008). Net present value analyzes the profitability of a project by determining the difference between the present value of the project’s cash inflows and outflows followed by subtracting the initial investment. (Investopedia, 2012). The decision rule applied to NPV is fairly simple, if the NPV is positive, invest; if the difference is negative, do not invest. Competition Bikes applies NPV to forecasted low and moderate sales for the next 5 years. After using the forecasted sales for low demand, the total present value (after subtracting cash outflows from inflows) is $560,719. If we subtract the initial investment of $600,000 from this amount, the NPV is -$39,281. This is a significant warning that the company should not proceed in building a manufacturing facility. On the other hand, if we use the forecasted sales for moderate demand, the total present value is $608,447. If we subtract the initial investment of $600,000, the NPV is $8,447. Therefore a positive NPV indicates the company should proceed with building the manufacturing facility. The biggest concern is determining which NPV to lean towards based on low or moderate sales. Unfortunately, the risk of having low sales outweighs the profitability benefit of having moderate sales. It is too risky for CB to move forward with the investment based on the NPV of low sales (-$39,281). In order for the company to profit from this investment, CB would need to have a moderate sales demand at minimum! The present value in NPV is calculated using an interest rate, also known as the required rate of return. CB’s required rate of return is 10%. When this interest rate is altered or calculated to make the total present value equal to the initial investment, the NPV becomes equal to zero; this is called the internal rate of return (IRR) (Pearson Education, Inc., 2008). The IRR is what a company can expect to earn from investing in the project and the higher the IRR, the more desirable the investment. The calculated IRR for low demand cash flows is 8.2% and the IRR for moderate demand cash flows is 10.4%. Based on these IRR figures, the company should not pursue the capital investment because the average IRR between both low and moderate sales is 9.3%. This is below the company’s required return on capital (hurdle rate) of 10% to pursue a capital investment. Again, the company would need to have a moderate sales demand, at minimum for this capital investment to be profitable and should therefore not pursue building a new manufacturing facility. WORKING CAPITAL: CB must effectively obtain and manage working capital for the expansion of the operation. CB must first look at their operating cycle, cash conversion cycle and free cash flow factors in order to improve production and management of working capital. Let’s discuss the company’s current status of each of the working capital and cash flow factors and determine how the company can improve in these areas. First, the operating cycle involves CB sending the distributor a monthly invoice for all raw materials ordered with terms of net/30 days. This can be improved by renegotiating the payment terms will distributors to net/15 days. This would increase cash flows by improving payment turn around time and accounts receivable collections. Additionally, the company can improve its relations with its distributers to increase effectiveness of its collection process. Another operating cycle factor is ordering and paying for inventory. Currently, the company pays for inventory in the month following production and all inventory ordered for the month is used leaving inventory levels (at the end of each month) at consistent levels. In order  to improve working capital the company should utilize and lower its year ending inventory balance. For example, at the end of Year 8, the company had $91,573 worth of inventory left over. The company should utilize the current inventory on hand before ordering similar raw material items. This will decease cash flows and leave fewer inventories on hand at the end of the year. Currently the average time in inventory is 25 days. This is a substantial turnaround time currently, however in the future, the company can consider replacing labor workers with fixed asset items to improve production time. This will satisfy customer demand by decreasing delivery time and improve cash flows by invoicing customers more frequently than 25 days after production. CB’s cash conversion cycle factors also impact working capital. Currently, the CB’s suppliers invoice at the end of the month for orders that month with terms of net/15. CB does an excellent job of preserving its cash flows by paying the invoices on the 15th of the month following the order.. CB can improve its working capital by negotiating for longer payment terms, i.e. net/30 days, allowing for more time for the company to earn money to pay their invoices. If this is not possible, the company can improve its forecasting measurements for ordering supplies and order the majority of the supplies needed for the month at the beginning of the month. This would increase the amount of time the company has sufficient supplies on hand without having to pay more money, (because the suppliers will still invoice for the orders at the end of the month, regardless of how early in the month the supplies were ordered). This can increase working capital because it acts as a contingency plan, to reduce the likelihood of running out of supplies, avoiding delays, or ordering supplies in excess. Free cash flow factors also affect CB’s working capital. Currently, the company recognizes depreciation in both manufacturing overhead and as depreciation expenses depending on the fixed asset. The company can use their depreciation data to increase management of cash flows by predicting when the company will have to spend a significant amount of money to replace an asset when its useful life expires. This will prepare CB for those unwanted – although necessary – fixed asset costs. Currently the  corporation’s marginal tax rate is 25%. The company can consider obtaining working capital by financing debt. This will leave the company with an interest expense at the end of the year, which is deductible from gross earnings and results in paying lower taxes. After CB improves its working capital, let’s discuss how CB can use its working capital for the lease vs. buy option for a factory building in Canada. CB can use its working capital to cover the $50,000 down payment (or buy out option if they decide to lease) and $200,000 for operational costs of the new factory. According to the data provided for the lease vs. buy option, the lease option will preserve cash outflows of $12,339, (purchase cash outflows are $333,999 and lease cash outflows are $321,660). Therefore, the company should lease the manufacturing facility to preserve cash outflows. Leasing the facility will also allow CB to deduct annual interest payments (6% interest) from the gross earnings to lower their tax payments. This will increase the company’s net earnings at the end of the year, also resulting in higher retained earnings and increased shareholder value. MERGER OR ACQUISITION: CB should consider many factors when deciding to merge or acquire Canadian Biking. Let’s analyze the pros and cons between a merge vs. acquisition and determine what the best move would be for CB. First off, if the company were to merge with Canadian Biking, the potential EPS would increase by approximately .021. This shows potential for increased ownership earnings, but is it significant enough? At the same token, the price/earnings ratio for Canadian Bikes at the end of Year 8 was 9 and CB’s was 70. This shows that CB’s current investors are expecting greater earnings in Year 9 and are willing to pay $70 for $1 of current earnings. This is not the case with Canadian Biking’s investors. Unfortunately a low P/E ratio of 9 indicates that investors are not expecting a significant growth in company earnings. This raises a concern if the merge will result in a potential increase of .021 in EPS. On the other hand, a merge would result in lower costs because CB would not be purchasing Canadian Biking outright. Canadian Biking also has a lower cost competition bike that can decrease production costs and complement CB’s current bike model being offered. This will result in  greater net earnings and cash flows. If the company were to acquire Canadian Bikes, CB can expect a gradual increase in cash inflows over the next 5 years. However, the current offered sales price for Canadian Biking is $286,000; this is 30% more than what the company was valued at, at the end of Year 8. Although CB has enough working capital to make the purchase, it would take 5 years of gradually increasing cash inflows to recoup the price tag of $286,000. This means it could take approximately 5 years, before shareholders saw a significant increase in earnings per share. Based on the pro and cons, CB should merge with Canadian Bikes to lower their production and delivery costs, increase net income, EPS and cash flows, and preserve working capital. The price to acquire Canadian Biking is simply unreasonable based on predicted cash inflows over the next 5 years. The merger will enhance CB’s market position in Canada by having a local distributer to handle all customer orders and provide cost effective and great customer service to the growing Canadian market. References Investopedia. (2012). Capital Structure. Retrieved from http://www.kotzinvaluation.com/articles/capital-structure.htm Investopedia. (2012). Weighted Average Cost of Capital. Retrieved from http://www.investopedia.com/terms/w/wacc.asp#axzz2Azkq4E2V Investopedia. (2012). Net Present Value. Retrieved from http://www.investopedia.com/terms/n/npv.asp#axzz2Azkq4E2 Pearson Education, Inc.. (2008). Horngren Accounting. Retrieved from http://wpscms.pearsoncmg.com/wps/media/objects/6716/6877765/hha08_flash_main.html?chapter=null&page=1042&anchory=null&pstart=null&pend=null Wenk, D. (2012). Using an optimal capital structure in business valuation. Retrieved from http://www.kotzinvaluation.com/articles/capital-structure.htm

No Child Left Behind and Special Ed Essay

This paper is written on the topic â€Å"No Child Left Behind† and how this law pertains to and how it affects special education. This act was passed n 2001 and is abbreviated as NCLB and at times pronounced as nickelbee. This law was proposed by President George W. Bush in 2001 and it is a US federal law. This legislation was base on blueprint and was represented by John Boehner, George Miller, Judd Gregg and Edward Kennedy after which it was signed by President Bush. (Abernathy, 2007). This law was basically aimed to bring improvement in the performance of the primary and the secondary schools in the United States. Moreover, this law also aimed to elevate the standards of the schools making sure that they are provides flexibility in choosing school for their children. It also focused on reading and the Elementary and Secondary Education Act of 1965 was also re-authorized. This Act was introduced during the 107th Congress, was passed by the House of Representatives on May 23, 2001and was actually signed into law by on January 8, 2002. The goal was basically to reform education and to set high standards and to ensure that these goals can be measured and improved. The Act further states that the basic skills must be enacted in the students and schools must receive federal funding. Standards of education are set by every state keeping in mind the control over the schools. Furthermore, this Act also states that the schools must also provide the details of the students such as their name, phone number and address to the military recruiters and institutions of higher education and this must be done unless the parents of that child do not ask the school not to provide any details. After this Act was passed, the measures of the act were fervently debated over its effectiveness. It has also been criticized and the criticism actually was that effective instruction and student learning could be reduced. However, in support of this Act, it is said that systematic testing provides data and so they schools that do not teach the basic skills in an effective manner can be highlighted after which improvement can be made based on the evaluations. This would improve the outcomes for the students and will also minimize the gap of achievement that persists between the students who are disadvantaged in any way. (Hess & Petrilli, 2006). At the time this law was implemented, the federal funding of education was increased by the Congress and the increase was from$42. 2 billion in 2001 to $54. 4 billion in 2007 while No Child Left Behind received a 40. 4% increase from $17. 4 billion in 2001 to $24. 4 billion. Later, the funding for reading quadrupled from $286 million in 2001 to $1. 2 billion. In 2008, a study was carried out by the Department of Education that showed the No Child Left behind Act on which around a billion dollars were invested actually proved to be ineffective. The special education programs were introduced in the United States and they were made compulsory in 1975. This was the time when the Congress passed an Act for the support of the disabled children. This ensures that every disabled student gets free and appropriate education and to apply least restrictions to such students. Moreover, to further enhance and make sure that this Act is being implemented, regular meetings are held between the professionals and the parents of the disable children to ensure that the specific needs of the children are being met and so that modification could be provided for the children who needed them. According to FAPE i. e. Free Appropriate Public Education, the disadvantaged children are to be provided free education at public expenses. They are also directed by the public and no charges are applied. It ensures that the individual needs of the child are met and free education is provided to them from preschool to secondary school education. The FAPE also prevents segregation that is done unnecessarily and to ensure that they have access to the maximum extent. Special education services and special equipment has to be given to the disabled children and a transition plan must be developed. This plan focuses on the future goals of the learner and to help him to live his life in future. Educators also believe that the disabled children should be taught together with the normal children because isolating these children would reduce their self esteem as well as their abilities. This is called mainstreaming i. e. the integration of the disabled and the normal children. However, they also have to have special classrooms and services and must also have a trained teacher. Moreover, the sessions that are held for the special children are called resource rooms that are equipped with all the required material. However, the disabled children can also join other children for other activities and there should be no restriction in it. (Pierangelo, 2004). Reference Abernathy, S. (2007). No Child Left Behind and the Public Schools. University of Michigan Press. Hess, F. M. & Petrilli,M. J. (2006). No Child Left Behind. Peter Lang Publishing. Pierangelo, R. (2004). The Special Educator’s Survival Guide. 2nd Edn. Jossey-Bass.