16) Travel and Tow Trailers Inc. makes small trailers for light-duty towing behind SUVs and small pickup trucks. Its trailers typically sell for $2,500. Many of its customers have asked for credit terms to aid in purchasing the trailers. The firm's finance department has estimated the following profile for its light-duty trailers and customer base: Annual sales: 10,000 trailers Annual production costs per trailer: $1,500 Lost sales if credit is not provided for customers: 2,000 trailers Default rate if all customers purchase on credit: 3.00% What is the dollar value of bad debts the firm expects to accumulate over a year? Given this amount, what is the maximum average amount per unit sold that the firm should spend on credit screening? A) $450,000; $45.00 B) $450,000; $56.25 C) $4,500,000; $450.00 D) $4,500,000; $$562.50 Answer: iholdthesolutionatgmail