Keenan Music -- Capital Budgeting Case The CEO for Keenan Music has been approached about the opportunity to make specialized guitars for famous musicians for the next 5 years. However, the current plant does not have the capacity to produce any new products. Therefore, in order to pursue this opportunity, Keenan Music will need to purchase additional production space, new equipment and hire additional employees. The CEO believes that this is a good investment, but needs to get the plant manager on board as he will be responsible for all three product lines, acoustic, electric and specialty. The plant manager has gathered all the necessary information about the specialty guitars project as follows. from W Initial Investment: Cost of Building Cost of Equipment Total Initial cost of Investment Annual Revenues and Costs: Sales Revenues Cash Variable Expenses Cash Fixed Expenses Depreciation Expense 2 3 Keenan's Discount Rate 4 Keenan's Tax Rate 5 16 27 28 29 Cost of Investment $ $ $ Building 15% 25% $ Salvage Va