The University of Akron's Reading Assessment Component (RAC) research study assessed the effectiveness of a computer-based literacy program, Principles of the Alphabet Literacy System (PALS), as an alternative to classroom instruction for functionally illiterate adults living in Summit County, Ohio. The RAC study assessed four objectives: (1) development of a pretest and posttest model to assess PALS; (2) measurement of quantitative and qualitative learning increases; (3) comparison of learning increases of PALS students to those of students in a selected adult basic education (ABE) program over the same time period; and (4) comparison of PALS program costs to the costs of a selected ABE program. Pretest/posttest scores were analyzed for a sample of 23 adults. Two client characteristics identified successful PALS participants: adult learners who scored at least a 75 on the Slosson Intelligence Test and those who completed at least 4 years of formal schooling. Six recommendations were made: extrinsic motivations should be used to improve attendance and lower dropout rates; a family literacy program should be established; quantitative and qualitative measures should be used to evaluate clients; follow-up telephone interviews should collect information from past clients; projected grade-level increases in reading achievement should be reevaluated; and greater care must be taken to enroll adults in appropriate literacy programs. (15 references) (NLA)