Question 5 You are just accredited as the Certified Public Accountant. Your first appointment as Financial Manager at Navami Sdn Bhd require you to prepare capital budgeting. Two investments are being considered by Navami Sdn Bhd. The net cost of each investment is RM100,000. The annual cash flows have the following projections. Assume that there is a 10% discount rate. a Based on the NPV and IRR, which investment should be accepted? (16 marks) b Mr. Johnny, a senior director of Navami Sdn Bhd has some clarification. The suggested 10% discount rate was suggested by the company's external consultant. Mr. Johnny believe that the discount factor was considered a competitive rate by most of the competitors. However, Navami Sdn Bhd has unique features, where there are sufficient internal cash reserve to undertake the projects and has lots of internal resources. As such, he suggest that Navami Sdn Bhd should apply WACC instead of general discount factor, Respond to Mr. Johnny. (4 marks)