BUSOBA 2321 ACTUAL MIDTERM PAPER
2026 FULL QUESTIONS AND CORRECT
ANSWERS
⩥ Break-Even Analysis. Answer: Break-Even Point: Profit = 0
P=0=(Price x Quantity) - (VC x Q)-(FC)
Or BEq = FC / (Price - VC)
Solve for Break-E Quant then plug into profit equation to see which
option is more profitable
⩥ Indifference Point. Answer: Quantity where each choice offers the
same profit.
Set the profit equations equal to each other and solve for Q.
Then test above and below found Q by plugging into each profit
equation to find optimal choice for those ranges
(0≤rangeA≤IndiffQ≤rangeB)
*could be same choice for both ranges
⩥ Indifference Table. Answer: Displays the Indifference Point and
provides space to solve for optimal choice for on each side of the indiff
point. (If more than two choices simply set ProfA=ProfB, ProfB=Profc,
Profc=ProfA, etc.., and test points between all found indiff Q's to find
best choice for all ranges)
, ⩥ Uncertain Decision Making. Answer: When you have multiple choice
to choose from, but also factor in strong/weak markets.
⩥ MAXIMAX. Answer: Choose the highest profit for each choice (not
always strong), then choose the choice with the highest of those profits.
⩥ MAXIMIN. Answer: Choose the lowest profit for each choice (not
always weak), then choose the choice with the highest of those profits.
⩥ MINIMAX. Answer: -Choose the highest profit for each choice (not
always strong), then choose the choice with the least regret.
-Regret = Most Profit Choice in Market - Choice being tested (Ex:
ChoiceA - ChoiceA = 0)
-Will calculate for strong and weak market.
-Identify the market with the greatest regret for each choice.
-Choose the choice with the least of those.
⩥ Decision Making Under Risk. Answer: Adds probability (P) to the
factors of choices and strong/weak markets to find expected monetary
value (EMV)
EMV = StrongDxP + WeakDx(1 - P)
2026 FULL QUESTIONS AND CORRECT
ANSWERS
⩥ Break-Even Analysis. Answer: Break-Even Point: Profit = 0
P=0=(Price x Quantity) - (VC x Q)-(FC)
Or BEq = FC / (Price - VC)
Solve for Break-E Quant then plug into profit equation to see which
option is more profitable
⩥ Indifference Point. Answer: Quantity where each choice offers the
same profit.
Set the profit equations equal to each other and solve for Q.
Then test above and below found Q by plugging into each profit
equation to find optimal choice for those ranges
(0≤rangeA≤IndiffQ≤rangeB)
*could be same choice for both ranges
⩥ Indifference Table. Answer: Displays the Indifference Point and
provides space to solve for optimal choice for on each side of the indiff
point. (If more than two choices simply set ProfA=ProfB, ProfB=Profc,
Profc=ProfA, etc.., and test points between all found indiff Q's to find
best choice for all ranges)
, ⩥ Uncertain Decision Making. Answer: When you have multiple choice
to choose from, but also factor in strong/weak markets.
⩥ MAXIMAX. Answer: Choose the highest profit for each choice (not
always strong), then choose the choice with the highest of those profits.
⩥ MAXIMIN. Answer: Choose the lowest profit for each choice (not
always weak), then choose the choice with the highest of those profits.
⩥ MINIMAX. Answer: -Choose the highest profit for each choice (not
always strong), then choose the choice with the least regret.
-Regret = Most Profit Choice in Market - Choice being tested (Ex:
ChoiceA - ChoiceA = 0)
-Will calculate for strong and weak market.
-Identify the market with the greatest regret for each choice.
-Choose the choice with the least of those.
⩥ Decision Making Under Risk. Answer: Adds probability (P) to the
factors of choices and strong/weak markets to find expected monetary
value (EMV)
EMV = StrongDxP + WeakDx(1 - P)
