The Department of Defense uses area cost factors (ACFs) to compensate for differences in construction costs in different parts of the country (and world). The area cost factor for Waianae, Hawaii is 2.19 and for Moody, Alabama is 0.83. If a cold-storage processing warehouse will cost $1,350,000 in Moody, Alabama, what would be the monetary difference in cost for a similar warehouse constructed in Waianae, Hawaii.
What will be an ideal response?
Cost in Hawaii = 1,350,000 (2.19/0.83) = $3,562,048
Difference = 3,562,048 - 1,350,000 = $2,212,048
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