Several people have been discussing the risk associated with a shortage of clinicals. How do you evaluate this?



To keep things simple lets assume:

• chance of delay at SGU due to clinical shortage = 0
• chance of delay at AUC due to clinical shortage = x
• SGU costs 50k more than AUC
• physician salary = 150k (primary care)
• residency salary = 45k (3 yrs)
• tax rate 35%
• opportunity cost of capital = 6% (long run avg return of stock market)
• begin residency at age 27
• retire at age 65

Assume that everything else except the chance of delay, x, is equal. Obviously, if x=0, you would prefer AUC to SGU. The question is, at what value of x would you prefer SGU? In other words, what is the cost associated with an x% chance of a delay?

I will bestow the BrendaB Golden Calculator Award (a real resume booster!) to anyone who figures this out.....