On January 1, Jagger Supply leased a truck for a five-year period, at which time possession of the truck will revert back to the lessor. Annual lease payments are $11,000 due on December 31 of each year, calculated by the lessor using a 4% discount rate. If Jagger's revenues exceed a specified amount during the lease term, Jagger will pay an additional $3,000 lease payment at the end of the lease. Jagger estimates a 70% probability of meeting the target revenue amount. What amount, if any, should be added to the right-of-use asset and lease liability under the contingent rental agreement?

Select one:

a. present value of $14,000

b. $3,000

c. present value of $3,000

d. $0