How are the cash flows for Projects S and L adjusted before calculating their NPVs?

The cash flows for Projects S and L are adjusted to reflect depreciation, taxes, and salvage values before calculating their NPVs. Additionally, the investment outlays include fixed assets and necessary investments in working capital, with cash flows occurring at the end of the year.

Before calculating the NPVs for Projects S and L, their cash flows are adjusted to account for depreciation, taxes, and salvage values. The initial investment outlays, represented as CF0, include the costs of fixed assets and any required working capital. This ensures that the cash flows used in the NPV calculations accurately reflect the project's financial impact over time.