Part 1 – Problem 02: Question 3 asks to consider the internal operation of the building. I am assuming that this part should apply to both the existing structure and the extension. Please confirm if this is the case. Thank you!

Yes, this is correct. You do not need to consider the layout of the existing structure before the extension is added. However, the existing structure should be considered in conjunction with the extension after it is added. Because no prior layout is provided for the existing structure, it is up to the team to design the layout.