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... iequivalent = i inflation corrected + f% + (i 'inflation corrected) (f%) In this problem: iequivalent = 5% f% = +2% iinflation corrected = unknown 0.05 = i inflation corrected + 0.02 + (i 'inflation. .. dollars, where all the costs and benefits change at the same rate Allowable depreciation charges are based on the original equipment cost and not increase Thus the stable price assumption may be suitable... specific and individual items, such as a labor cost index, a material cost index, a “football ticket” index, etc Both commodity specific and composite indexes can be used in engineering economic