Matthew is considering several possible compensation alternatives for services he has provided as a consultant: Option A: Matthew could receive $11,000 today. Option B: Matthew could receive $17,000 five years from now. Option C: Matthew could receive $3,000 at the end of each of the next five years.

Required:

1. Calculate the present value for each option assuming that Matthew can earn 5 percent on any investment funds.

2. Which option results in the greatest financial benefit to Matthew?

3. If Matthew earns 8 percent, will that change your answer to # 2 above? Please explain.