(b) Custom Graphic Works has been operating for just over six years, and sales are exceeding targets. Currently, two designers are working full-time, and the owner is considering increasing capacity to meet demand where this would involve leasing more space and hiring two new designers. Currently, the owner of the company has more work than he can cope with, and he is outsourcing to other design firms at a cost of RM87 an hour. The company outsources an average of 125 hours of work each month and he estimates that revenue is increase by 50 percent with increased capacity. Additional information: 6) Lease for 750 square feet available next door at RM18 per square foot. (ii) Knock out walls and reconfigures office space at RM15,000. (iii) Salary including benefits at RM50,700. (iv) Recruitment costs at RM11,250 (v) Orientation and training at RM3,000. (vi) Furniture and hardware are RM5,000. (vii) Software licenses are RM1,000. (vii) Construction downtime for two weeks at approximately RM7,500 per week. (ix) Paying in-house designers RM15 per hour each month compared to RM50 per hour outsourcing. (x) Improved customer service and retention in-house design at RM67,030. (xi) Improved productivity per designer at RM58,500. The risk-free rate is 4.25 percent, risk premium is 3.75 percent and tax rate is 27.5 percent. Based on the information given, as a risk analyst, you are requested to advice the firm by constructing the Net Present Value (NPV). (9 marks) (b) Custom Graphic Works has been operating for just over six years, and sales are exceeding targets. Currently, two designers are working full-time, and the owner is considering increasing capacity to meet demand where this would involve leasing more space and hiring two new designers. Currently, the owner of the company has more work than he can cope with, and he is outsourcing to other design firms at a cost of RM87 an hour. The company outsources an average of 125 hours of work each month and he estimates that revenue is increase by 50 percent with increased capacity. Additional information: 6) Lease for 750 square feet available next door at RM18 per square foot. (ii) Knock out walls and reconfigures office space at RM15,000. (iii) Salary including benefits at RM50,700. (iv) Recruitment costs at RM11,250 (v) Orientation and training at RM3,000. (vi) Furniture and hardware are RM5,000. (vii) Software licenses are RM1,000. (vii) Construction downtime for two weeks at approximately RM7,500 per week. (ix) Paying in-house designers RM15 per hour each month compared to RM50 per hour outsourcing. (x) Improved customer service and retention in-house design at RM67,030. (xi) Improved productivity per designer at RM58,500. The risk-free rate is 4.25 percent, risk premium is 3.75 percent and tax rate is 27.5 percent. Based on the information given, as a risk analyst, you are requested to advice the firm by constructing the Net Present Value (NPV). (9 marks)