B737 Captain reported aircraft had an MEL for VNAV/LNAV resulting in the Captain refusing the aircraft for lack of navigation capability.

Narrative

Aircraft had an MEL 22XXXX which we as a crew had no problem with.Aircraft came in with a write up of Flight Director VNAV and LNAV dropped off during takeoff roll selectable after takeoff."Based on that write up Maintenance issued MEL 22XXXX. This made the Flight Directors inoperative and LNAV/VNAV unavailable to be used. Our flight plan had a RNAV departure/arrival. Refused aircraft based on unable to navigate without LNAV.Had discussions with Dispatch and Maintenance Control. I was asking how we could navigate without LNAV based on our flight plan. Talked to Chief Pilot; had conference call with SR Manager 737 Flight Standards. The conference call helped clarify that we were correct about not being able to navigate safely with the MEL. I mentioned that the MEL; although a legal MEL; should not be applicable to revenue flights; just Maintenance pilots repositioning the aircraft to get repaired. Flight Standards Manager agreed with me. Dispatch; Maintenance Control; the Chief Pilot and the SR Manager of 737 Flight Standards were all very helpful resources.MEL 22XXXX mentions not to engage the TOGA below 400feet. We were not sure if the previous crew could have engaged TOGA below 400 feet by mistake; which could have caused the writeup they did; or if it was another problem.Without being able to contact the previous crew about what transpired; no one was sure as to what the real problem was."