IMANET Exam CMA Topic 6 Question 60 Discussion

Actual exam question for IMANET's CMA exam

Question #: 60
Topic #: 6

[All CMA Questions]

MEC Corporation has 100,000 shares of stock outstanding. Below is part of Mac's Statement of Financial Position for the last fiscal year.

What is the maximum amount MEC can pay in cash dividends per share and maintain a minimum current ratio of 2 to 1? Assume that all accounts other than cash remain unchanged.

A$2.05

B$2.50

C$3.35

D$3.80

Show Suggested Answer

Suggested Answer: C

Decentralization results in greater speed in making operating decisions because they are made by lower-level managers instead of being referred to top management. The quality of operating decisions should also be enhanced, assuming proper training of managers, because those closest to the problems should be the most knowledgeable about them.

by Melodie at Oct 24, 2022, 04:30 PM

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Elin

1 months ago

I know the answer is C) $3.35, but I can't help but wonder if MEC's CEO is secretly hoping for option D) $3.80. You know, just to treat themselves to a little extra vacation time. Hey, a guy's gotta live a little, right?

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Sharan

1 months ago

Ah, the classic current ratio question. I'm confident that C) $3.35 is the right answer here. It's always important to maintain a healthy current ratio, even if it means sacrificing a few bucks in dividends. After all, you can't buy a Lamborghini with a bad current ratio, right?

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Rebecka

5 days ago

I think you're right, C) $3.35 seems like the correct choice.

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Jerry

1 months ago

Hmm, this is a tricky one. I'm torn between B) $2.50 and C) $3.35. I'll have to double-check my calculations, but I think C) is the correct answer. Gotta love these financial accounting questions, they really keep you on your toes!

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Mattie

23 hours ago

I agree, I also calculated it to be B) $2.50.

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Taryn

16 days ago

I think B) $2.50 is the correct answer.

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Cordie

2 months ago

I'm leaning towards option D) $3.80. That seems a bit high, but the question specifically says 'maximum amount' that MEC can pay, so I'm going with the higher option. I hope I'm not missing something crucial here.

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Marisha

11 days ago

User3: But the question does say it's the maximum amount MEC can pay.

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Stephanie

20 days ago

User2: I agree, it does seem high.

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Ena

21 days ago

User1: I think option D) $3.80 is too high.

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Luann

2 months ago

But if we calculate based on the current ratio, it seems like D) $3.80 could be the correct answer.

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Sharee

2 months ago

Based on the information provided, I believe the answer is C) $3.35. This is the maximum amount that MEC can pay in cash dividends per share and maintain a minimum current ratio of 2 to 1. The key is to keep the current ratio at 2 to 1, which means the current assets should be twice the current liabilities.

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