2) Little Runabout Inc. makes small trailers for light-duty towing behind SUVs and small pickup trucks. Its trailers typically sell for P2,500. 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: 12,000 trailers Annual production costs per trailer: P1,500

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 peso value of bad debts the firm expects to accumulate over a year? A. P9,250,000

B. P6,500,000 C. P450,000 D. P540,000