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Answer (D) is correct . Steps 2, 4, and 5 are appropriate for alleviating Amador’s budget problems. Step 1 should not be performed because a budget imposed from the top is more likely to encounter resistance. Step 3 should not be performed because operating units will tend to consider only their own interests when preparing budgets.

Answer (A) is incorrect because A budget imposed from the top is more likely to encounter resistance.
Answer (B) is incorrect because Operating units will tend to consider only their own interests when preparing budgets.
Answer (C) is incorrect because While studying previous periods and sharing the budget with all employees are important steps to correcting Amador’s problems, incrementally improving the budget through an iterative process is also crucial.