The correct option is To define the longest tolerable downtime for each critical function before unacceptable consequences occur.

The Maximum Acceptable Outage sometimes called MAO is a time based threshold that defines how long a critical business function can be unavailable before the organization suffers unacceptable consequences such as severe financial loss legal or regulatory penalties or major reputational damage. Defining the MAO helps prioritize which functions must be recovered first and guides continuity strategies.

MAO is used to derive recovery objectives and resource allocation. For example it helps set the Recovery Time Objective or RTO for a function so that recovery efforts keep downtime under the MAO.

To calculate the highest potential financial loss resulting from an interruption is incorrect because that option describes a monetary impact assessment or loss estimation rather than the time based concept that MAO represents.

To identify the minimum staffing levels required to sustain daily operations is incorrect because staffing is a resource planning detail used to support recovery and continuity but it does not define how long a function can be down.

To determine the appropriate recovery point objective for systems and data is incorrect because the Recovery Point Objective or RPO addresses acceptable data loss in terms of time and is distinct from MAO which defines tolerable downtime. MAO informs RTO decisions rather than RPO.

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