Management's ranking of business units and establishing a priority for resource allocation should

Question

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Prioritizing business units with bright profit and growth prospects and solid strategic and resource fits ensures that resources are invested in areas with the greatest potential for return. This approach also aligns with the overall goals and strategies of the company. Utilizing activity-based costing and benchmarking can aid in the decision-making process, but should not be the sole determining factor. Funding proposals and cash flow considerations are important, but again, should not be the only considerations when ranking business units for resource allocation. It is also important to avoid putting too much emphasis on a single business unit, and instead spread out resources among multiple units to mitigate risk.

Management's Ranking of Business Units and Establishing a Priority for Resource