Savings and Cost Advantages
Save up to 33% over conventional methods
Most of our customers find that they can save up to 33% on their construction
costs by using Modular Officesproducts. The reason is high speed and
automated manufacturing processes. This productivity can not be matched by any
construction crew. In fact, just one of our fabrication lines can produce over
15,000 square feet of finished wall panels in a single shift. And as any
experienced builder can tell you, site construction is labor intensive and
expensive.
You Save More When You "Build for Change"
Simply put, Modular Officesproducts are reusable... so when you make a
change... you don't lose your investment, you re-use it. Compared to
conventional methods, that's like getting materials free... over and over, as
you make changes. Thousands of our customers benefit from this advantage every
year. You also don't have dumping fees to remove demolished construction....
That savings aside, there is something far more important; the environmental
impact. Reusing Modular Officesproducts because of a relocation or by
changing a configuration, is recycling at its best.... We are very proud of
this aspect of our design because we understand the importance of conservation.
Construction Depreciation
At our request Modular OfficesT accounting firm Grant Thorton® rendered an
opinion of the wall systems with regards to depreciation and its
classification. In general, by definition (which has remained consistent over
the years), the product is considered equipment and depreciates accordingly.
Thus allowing a company to completely write off the expenditure over 5 times
faster than typical construction.
How does this advantage affect the cost?
With current tax laws, the bottom line is that conventional construction's
initial cost would need to be over 32% less to match the tax advantages of
National product. The following breakdown illustrates this and lists the
assumptions.
Assumptions
-
Maximum corporate tax is 39.6%
-
National product qualifies for 7 year depreciation, yearly write off is 14.3%
(1/7 project cost)
-
Construction depreciation is 39 years, yearly write off is 2.6% (1/39)
-
After seven years Modular OfficesT building is completely written off,
while only 17.9% of conventional is written off.
-
Using the above tax (39.6%) to determine a projects true cost, Modular OfficesT returns 39.6% in tax savings to the company where conventional
returns only 7.6% (17.9% x 39.6%) in the first seven years.
(100% - 39.6%) = 60.4% modular cost = 92.4% conventional cost x
(Y being the cost difference) Y = .604 - Conclusion, National has a 32% price
advantage (1 - .604 = .39.6).
*As a foot note, many situations can cause other rulings to apply, Grant Thorton
® recommends companies discuss the matter with their CPA's to determine if
their particular situation would qualify for this depreciation.
Reduces Labor Costs by up to 50%.
This could be a very conservative figure... considering the installation speed
of Modular Officesproducts and the reduction in trades necessary to build,
you could find this savings tremendous. It takes only one crew to assemble a
Modular Officesbuilding, and several trades like glazers, painters,
carpenters etc. to build conventionally... the larger the project, the more the
savings.
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