A company has a Cloudformation template that is used to create a huge list of resources. It creates a VPC, subnets, EC2 Instances, Autoscaling Groups, Load Balancers etc. Which of the following should be considered when designing such Cloudformation templates?

Answer options:

A.Ensure to create one entire stack from the template.
B.Look towards breaking the templates into smaller manageable templates.
C.Package the templates together and use the cloudformation deploy command.
D.Package the templates together and use the cloudformation package command.

Answer - B
This recommendation is also given in the AWS Documentation.
As your infrastructure grows, common patterns can emerge in which you declare the same components in each of your templates. You can separate out these common components and create dedicated templates for them. That way, you can mix and match different templates but use nested stacks to create a single, unified stack. Nested stacks are stacks that create other stacks. To create nested stacks, use the AWS::CloudFormation::Stack resource in your template to reference other templates.
Option A is incorrect since this is not the recommended design practice.
Options C and D are incorrect because these are used for packaging and deployment and not for the design stages.
For more information on best practices for Cloudformation, please refer to the below URL-
https://docs.aws.amazon.com/AWSCloudFormation/latest/UserGuide/best-practices.html