Tow Trailers Inc. makes small trailers. 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 change in the profit if the firm moves from a cash-only policy to a credit policy?

$1,409,000 $1,527,500 $1,649,000 $1,250,000 $1,700,000