Consider the information below and determine whether your company should produce a particular component in-house or whether the company should consider outsourcing the component.

Year 5 +100 Cost of making the component in-house (R'000) Year Year Year Year Year 0 1 2 3 4 Plant and -1000 0 0 0 0 equipment Manufacturing 0 -150 -200 -250 -350 cost Opportunity 0 -100 -200 -200 -200 cost 0 0 Cost of outsourcing (R'000) Year Year 1 Year 2 Year 3 Year 4 Year 5 0 Purchase 0 -800 -900 -1000 -1200 0 cost (Note: Ignore tax, assume a discount rate of 10%, you may use discount factors rounded to three decimals; show all your calculations)