Potential energy of mass 'm' placed at a height 'h' from ground = mgh. This means that as the height of the object increases its potential energy also increases. Using this as a fact what can you say about the statement below: "Since the potential energy increases with height and potential energy is a stored energy, if a 100 m. deep well is dug exactly below where the object mass is suspended by a massless inelastic string to the ceiling above, then its potential energy . . . . . "
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We actually calculate the potential energy with respect to an object at the plane of the ground. So no matter how deep is dug the ground it has same potential energy with respect to that reference object.