Matthew is considering several possible compensation alternatives for services he has provided as a consultant:

Option A: Matthew could receive $8,000 today.

Option B: Matthew could receive $2,500 at the end of each of the next four years.

Option C: Matthew could receive $12,000 five years from now.

Required

1. Calculate the net present value for each option assuming that Matthew can earn 7 percent on any investment funds.
2. Which option results in the greatest financial benefit to Matthew?
3. If Matthew earns 10 percent, will that change your answer to # 2 above? Please explain.