Storing credentials in source code files (Option B) is insecure as they're easily discoverable in plain text. Environment variables (Option A) are also insecure because they're available in plain text and accessible to applications on the server. ACLs restricted config files (Option D) require manual access management and still risk exposure in plain text. Secret Manager (Option C) is the correct choice as it's designed for secure storage of sensitive data like API keys and passwords, offering fine-grained access control and encryption to ensure credentials are securely stored and accessed only by authorized services or users. For more information, refer to Google Cloud's documentation on Secret Manager and Kubernetes Engine's concepts on secrets.