A study was conducted to assess the economic impact of Montgomery College (MC) on local business, local government, and the job market in the surrounding community for fiscal year 1981. Using linear cash-flow equations designed for the American Council on Education and adapted for MC, the study assessed monies coming into the college from students and from federal, state, and county sources and traced the flow of money into local business and government sectors. Study results indicated that: (1) the total impact on local businesses made by MC and its employees was nearly $12 million, including $8.9 million in direct expenditures and $3.1 million resulting from the multiplier effect; (2) 37 cents of every dollar spent by the college for operations and compensation entered the business sector for goods and services; (3) for every county tax dollar appropriated, $1.07 was returned to the business sector; (4) for every $0.99 spent by the county to provide services for college employees and their families, $1.00 was received by the county through taxes or revenue transfers; (5) for every $0.72 spent by the county to support MC and provide college-related services, MC returned $1.00 in college-related revenues to the county; and (6) the college employed 980 people full-time, and an additional 340 people were employed to support college employees and their families. (HB)