Genetec Bhd$.$ is a medium$-$sized manufacturing company that plans to increase capacity by purchasing new machinery at an initial cost of RM$3\mathrm{.}5$ million. The following are the most recent financial statements of the company: Income Statement for years ending $31$ December The investment is expected to increase annual sales by $6,000$ units. Investment in replacement machinery would be needed after five $(5)$ years. Financial data on the additional units to be sold is as follows: Variable administration and distribution expenses are expected to increase by RM$220,000$ per year as a result of the increase in capacity. In addition to the initial investment in new machinery, RM$500,000$ would need to be invested in working capital. The investment in working capital is released at the end of year $5.$ The scrap value of the machinery after five years is expected to be negligible. Tax liabilities are paid in the year in which they arise and Genetec Bhd$.$ pays tax at $30\%$ of annual profits. In preparing its financial statements, Genetec Bhd$.$ uses straight$-$line depreciation over the expected life of fixed assets.The company's target capital structure is $30\%$ debt and $70\%$ common stock. The yield to maturity on its bond is $10\mathrm{.}5\%.$ The risk$-$free rate of return $($k$\_$r f$)$ is $5\mathrm{.}5\%,$ and the market rate of return $($k$\_$M$)$ is $11\%.$ The company's current beta is $1\mathrm{.}81.$ Required: a$.$ Calculate the company's weighted average cost of capital. $(4$ Marks$)$ b$.$ Calculate the net present value $($NPV$)$ of the proposed investment and comment on your findings. $(21$ Marks$)($Total: $25$ Marks$)$