Question: In Chapters 5 (Present Worth Analysis) and 6 (Annual Cash Flow Analysis) it is assumed that prices are stable and a machine purchased today for

In Chapters 5 (Present Worth Analysis) and 6 (Annual Cash Flow Analysis) it is assumed that prices are stable and a machine purchased today for $5000 can be replaced for the same amount many years hence. In fact, prices have generally been rising, so the stable price assumption tends to be incorrect. Under what circumstances is it appropriate to use the "stable price" assumption when prices actually are changing?

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