Factories and Progress 3
Eikyuu
Due to popular demand, by Aymay I will be tackling the housing industry next. This time however, I want to include the impact of taxes so I will also get back to the other company types, which were previously analyzed without that factor here (weapon) and here (food).
The biggest determining factor for houses is that they require workers, as it is impossible to work as a manager in either the raw material companies or house factories. This means that the prices will be closely tied to salaries, and it makes more sense to use the highest available salaries, rather than average, as a guide for starting a business. This is the case simply because new workers will usually choose the best offer.
An important thing to remember is that there are plenty of work communes around, and their work cost is lower than even the average. Since the formulas are pretty simple, I hope the reader will have no difficulty in applying what I write to their particular situation, though.
It is immediately evident that producing raw materials is viable only with the biggest (5th type) company: the Granite Quarry – other types produce less while the salary remains the same. With the current highest salary of 45cc, producing 250 RM requires the price of 0.18cc, whereas the the global prices have been oscillating withing the range of 11 to 15cc. Not an encouraging result.
To be competitive, the price should be at about 0.13cc, which means a salary of at most 32.5cc, or, for the 45cc salary, a resource bonus of 40%, requiring two regions with trading route. Japan currently has none, and this is one of the reasons why our housing industry is almost non-existent.
Keep in mind, that the above is just on the verge of profitability. In order to compete with the food RM factories of type 3, which give about 5cc of daily income, the above salaries have to be lower by those 5cc – increasing the price will not work, because potential buyers can use the huge foreign supply. At the same time, the starting cost for a quarry is 35g instead of 10g for a fishery, which is another setback.
The situation is much better in communes, where salaries can be 10 or even 1cc, but at the same time, the potential worker can be used to produce much more sought-after goods there, like high quality weapons. Still, such communes are currently the only viable source of house RM in Japan, due to the lack of regions and relatively high salaries on the job market.
It thus seems so far, that the house RM in themselves are not a good source of income. Let us turn to houses themselves next. As with food, one can buy the RM or produce them, but given the above analysis, it is sadly more profitable to buy them abroad than produce for yourself – unless you have friends working for low salaries for you.
To produce a Q1 house in normal circumstances, 1000 RM and 5 days of work are required. With the above wage we get
Q1 house cost = 1000 * 0.13 + 5 * 45 = 355cc.
This is nowhere near the global market prices which can go as low as 270cc. The first modification to consider are the resources. With 2 regions, and a 40% bonus, the percentage contributed by a worker each day jumps from 20% to 28%, so that only 4 days are needed, and a remainder progress of 12% is left at the end. On average this means 100/28 = 3.57 salaries are needed, so the cost falls to 130 + 160.71 = 290.71cc, a much better result.
As before, let us take the fishery as the benchmark, and expect 5cc of profit per day. In the first case, that would elevate the price by 5 * 5 to 380cc. In the second, by 3.57 * 5 = 17.86 to 308.57cc. With two regional resources we could now compete with the rest of the world, or at least make houses more affordable domestically.
To make things more exact, let us look at taxes. RM are exempt from VAT, and the work tax is deducted from the wages, so the RM profit given above is not influenced. VAT has to be taken into account when selling houses, though.
According to the wiki page, VAT is included in the price as follows. For a product worth 100cc and VAT = 10%, it is not the case that 90cc go to the seller and 10cc to the treasury. Rather, the tax is calculated as the percent of what the seller gets, so
100cc = 90.91cc + 10% of 90.91cc. In other words, if q is the income, p the tax, and R the price, the formula is:
R = ( 1 + p ) * q, or
q = R/( 1 + p ).
This makes quite a difference: for 50% of tax, when the seller gets 1/1.5 = 66.67% of the price, or in the extreme case of 100% VAT, the seller still gets 1/2 = 50%, and not zero.
Coming back to houses, with our current 1% VAT, about 3cc would be deducted per house. Here is how taxes impact the house prices, with 45cc salaries, assuming the manufacturer buys RM for 0.13cc and wants to earn 5cc daily.
1% VAT, 0 regions Q1 house price = 383.8cc,
1% VAT, 2 regions Q1 house price = 341.72cc,
1% VAT, 5 regions Q1 house price = 257.55cc,
10% VAT, 0 regions Q1 house price = 418cc,
10% VAT, 2 regions Q1 house price = 372.167cc,
10% VAT, 5 regions Q1 house price = 280.5cc.
The general formula for the price R at tax p is
R = (1 + p) * (1000 * m + (5/rf) * (S + 5)),
where m is the RM price, rf is the regional factor equal to 1 + bonus (0 to 100😵
and S the salary. Note, that increasing the tax in Japan's situation would be a mistake, stifling this industry. However, with enough regions, taxes could be raised benefiting the treasury while still maintaining competitive prices.
The above could be reversed to ask: given the number of regions and VAT, what salary could a manager offer? Just solve the above equation for S. Taking the global price of 290cc, we get
Salary at 1% VAT, 0 regions = 26.43cc,
Salary at 1% VAT, 5 regions = 57.85cc,
Salary at 10% VAT, 0 regions = 21.73cc,
Salary at 10% VAT, 5 regions = 48.45cc.
These are salaries as paid by the employer, and from the employee's perspective there is also the work tax, w, deducted simply so that the net salary is S*(1 - w). Currently the workers in Japan get 99% of the gross salary, while at 10% the above figures would fall to
23.79cc, 52.07cc, 19.56cc and 43.61cc, respectively. So again, raising VAT and work taxes before obtaining regions is counterproductive.
And why should this industry be promoted? Thanks to the overtime working mechanism. Let us see what happens when the worker can afford a house. Apart from the energy bonus, they get 24 Overtime Points each day (1 point per hour), allowing them to work twice for a week because each house lasts for 7 * 24 = 168 hours. If we take the last example, so that the house costs 290cc and the salary is 48.45cc, the worker earns
2 * 48.45 - 290/7 = 55.47cc daily: an increase of 7cc.
But that is not all. The employer now gets to produce the house twice as fast if he has two Q1 companies, so his daily revenue increases, and he can sell the house cheaper, or offer a higher total daily salary, either of which will benefit the worker. The are many ways to arrange this, and this seems especially worth considering in communes – a topic I hope to investigate in the future.
As an example, consider the situation of 10% VAT and 5 regions, and take the single salary of 40cc. The worker now gets paid 80cc daily, and the house takes 1.25 days to finish, so to secure the daily profit of 5cc, the manager needs to sell it for 1.10 * (130 + 1.25 * (80 + 5)) = 259.88cc, and if the worker buys it every week, his daily income becomes 43cc instead of just 40cc in the usual setup, or 42.57cc vs 39.60cc after taxes.
Unfortunately, the advantages are limited by how houses are stacked. Another Q1 house will not produce additional Overtime Points, but just extends the duration of the first house. If a Q2 house were to be used, the cost for the worker becomes too great. They are twice as expensive as they require twice the amount of work to build, but at the same time offer essentially a copy of the Q1. The cost of having both houses running all week would be
(290 + 580)/7 = 124.29cc per day, so even with the basic salary of 60cc, working 3 times would lower the income: 3*60 - 124.29 = 55.71cc. This shows how poorly the "mechanics" have been thought out.
Regarding taxes in the food industry, the results of RM companies presented previously need to include the work tax paid by the manager, which is calculated from the average salary in each country. So the type 3 RM company with 40% regional bonus would bring
125 * 1.4 * 0.03 - 1% * 29.85 = 4.95cc daily – effectively a 0.3/5.25 = 5.71% tax. Its CR is also affected and becomes 7.43%.
For a type 5 company the tax would be the same, but the income would be 250 * 1.4 * 0.03
= 10.5cc, giving 10.2cc profit with the effective taxation of 2.93% and CR of 4.37%.
Finally, a Q1 factory combined with a type 3 RM company, requires counting three taxes. In the same situation as above, 175 RM are produced, 140 used for food production. The income is thus 140 * 0.06/1.01 + 35 * 0.03 - 2 * 1% * 29.85 = 8.77cc. Effective taxation is 7.23%, and CR = 6.58%.
Recently, there has been active debate both public and congressional regarding taxes, and I would like to demonstrate a very important point taking all of the above into consideration. It is best seen using the examples of the USA and Republic of China (Taiwan), both of which have noticeably higher taxes than Japan.
With 12% work tax, 5% VAT and 35.12cc average salary, the type 3 RM companies in the USA would bring -0.46cc. Producing and selling Q1 food (buying RM) incurs a loss of 1.36cc. Producing a house costs 320.88cc with their market price being 290cc, so over 30cc of loss. The reason they can even afford to produce is that they have full resource bonuses – all provided already by their original regions.
In the case of Taiwan, the situation is not as severe, for the work tax amounts to 3% of 43.42 = 1.3cc. This still makes the basic income of type 3 RM company to be only 2.45cc, while with full regions that becomes 6.2cc. Their market price of houses is 295cc, but owing to the 5% VAT and high salaries the cost is 364.46cc – again, an impossible venture, were it not for the regions. The crucial difference is that the original regions of Taiwan barely provide 4 resources, showing how heavily dependent they are on occupied territory, and explaining why tax levels are at safer levels than in the USA.
To summarize, I hope to have clarified how the housing industry works in general, where the prices come from and what the potential business models to explore are. Specifically the Overtime Points seem worth using, although with the ill-chosen production requirements for higher quality houses, there are serious limitations. Finally, I hope to have convinced you, that at the moment, the situation in Japan is favorable for new business thanks to low taxes, and that this should be maintained until we have enough regions.
I welcome all comments, questions and criticism, especially because the sources of wiki are known to contain misinformation. For previous discussion of these topics, please see: Factories and Progress Part 1 and F&P Part 2.
Comments
Great article
I was waiting for it , thx 😃
& now questions:
1.Can you put extra overtimed work into house building, when you have only 1 hireable (Q1 house company)? Or you can only put 1 'point' into house building each day?
2. Aren't Q2 starting to get profittable with 3 regions with house materials and Q3 with 5 regions? (Simple reasoning: 100%/7=~14,28% http://wiki.erepublik.com/index.php/Productivity ) 3. Houses not only give overtime work points, but also increase health limits (Q6,Q7 will also increase energy recovery every 6 minutes), which generates another income (medals for fights: FF,BH,CH,MM): for example:
If I want to use all of energy regeneration , with 450 health limit I need to fight every 4h30mins, (2h15mins after 500prestige points& energy recovery bonus)
but with Q1-Q5 houses I would have limit of 1030 making it ~10h20min and ~5h10min respectively 4.well of course I would prefer stable energy increase (energy center+100) but these cost 199G each so they're out of reach...houses on the other hand are affordable and seems like a nice, (but unfortunately shortterm ) alternative.
^・ω・^
btw. How does process in which country changes resources looks like? Is it some kind of time-limited special event? Can eJapan become House manufacturing masters one day? 😛
(/me noob)
As far as I know it requires the special event (resource wars), which we only had once so far. You can read about the in the Update notes.
A general note: the higher quality companies of all products and communes will be analyzed eventually, but I cannot fit all into one article 🙂 They are not as simple as just managing one's own RM companies after all.
Ad 1. The Q1 factory only has one work slot, so you need another factory for that and they both count toward completing the same house.
Ad 2. Q2 _factories_ are profitable, simply because the price of Q2 house is 580 - this reflects the requirement for double production input. What I wrote pertained to the use of Q2 _houses_ by workers to increase their salary. Regions help even further in the first case, but not in the second. Is that what you meant? And yes, I expect the situation changes in communes, but that requires an arrangement and proper distribution of houses to the workers - you will have to wait for another article for that 😉
Ad 3.&4. I agree: the Q6 and Q7 will indeed change the picture a lot by increasing regeneration, but we need to wait for their introduction for details. As for the health limit, a set of Q1–Q5 extends it by 580 BUT it costs ~7400cc=37gold per week! The energy storage sales are rare, but using them I think it is much better to spend (gradually) 500g on +500 energy _for ever_ instead of 780g for +580 energy just for 5 months. (I assume, following the wiki, that only the temporary energy centers cannot be stacked.)
Thx for answers 😁
Ad1.So there's no way to get around limits & produce houses faster this method :/ too bad
Ad2. I meant houseception = a house company worker producing houses which he'll use to boost their productivity (using house's overworking hours for increased production of houses = endless loop 😛 )
Ad3. o.O lol , I didn't check the Q4&Q5 prices , they're huge!!
Ad 1. There is a way - just buy another Q1 factory, as I said they will both contribute to the same house, so if the employee works twice, he will produce the same house twice as fast.
Ad 2. Haha the houseception would end at level 5 though 😉 Or 7, when they introduce the remaining houses. I think a houseception commune is viable, will have to check though. What is currently impossible is just to buy a Q2 house to improve a salary in an unrelated job.
So, according to information from The Great Cornholio, you can only buy 1 of each type of energy centers. It still makes sense to buy them, because they are a one time expense, but in order to considerably extend the health limit, houses are necessary. This is useful for one-time big campaigns, or if you can steadily win BH medals (the numbers depend on your division and wage), like Kami Neko said. 𝗛𝗼𝘄𝗲𝘃𝗲𝗿, if you just want to increase your salary, Q1+Q2 houses can only be used for salaries above 60cc, and Q1+Q2+Q3 for salaries above 90cc.
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Good job Tomasz!!
V-17 + S-18
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Thank you!
Good article.
I use all 5 houses and i get something like 300CC from salary and 4 gold from BH medals.
I already got all i paid for the houses 🙂
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I can earn in week 10 BH = 40 gold = 8K+
if you try you will se its no porblem to fnd someone to pay you 300cc. in my caseit was cople of days. also its not need to all houseses work non stop and 3rd if you go on only one medal per day on lou number and combine that with good CO its wery easy
If that were the case you would have 520 medals just for the past year, and have 65 in total, so that doesn't quite add up...
Also, have you tried the energy centers? Do you know if they stack? Because it makes no sense to pay for the limit every week if you can just pay once and have it for ever. The salary is not worth it, assuming you really earn that much from BH that is.
I bought all houses only few days ago, and already made about 30+ gold
Ah I see, then we cannot say how it works in the long run yet. I hope the trend continues for you 🙂 but be sure to check it carefully in a month or so.
People just need learn how to make BH... I have only 28K (Because i left the game for few months or half year), so for me it hard but if i had 60K or at least 48K i could made about X1.5-2 BH than now.
That is true, with lots of strength the additional health really improves the chance for BH, which then generates gold. But that is the gist of the problem: for high strength you need training contracts, and upgraded grounds, which takes 400 gold to begin with. You need gold from other sources before you start geting it from BH.
Yes and it is very hard without bying gold.
buying*
reguraly i spent 3 and. half years to do that all wit. hout bying gold. but you must also use fact that this game is not fer with old players because main curs and aksent of game been changed cople of time first was good to have economy than no. than again you needed economu than day put in traning houces and division and make esirer to new player to risc a goal beacuse thay make diviions with level key. s
That's the point, younger players can't use that strategy.
Damn, I deleted my comment by accident :/
Let me repeat that, with salary below 60 even using Q2 houses brings a loss (see comments to Aymay). And yes, it is now possible to find 50+ salaries, which was not the case a few weeks ago, hence what I wrote about being lucky about 300cc. If you don't use the houses all the time, as Vuk says, you will not earn enough tickets to work everyday 5 times. So you will always be losing money with houses - or should I say, always paying with houses for additional energy. And as a younger, nonpaying player, you will not get any medals at all.
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What are Houses used for?
They provide two things at the moment: 1. increase the maximum energy and 2. generate work tickets, which can be used to work more than once for your employer. Depending on your salary they might increase your daily earnings.
CSRF attack detected.
Now my comment will just be...
Great article. Took a while to read but you put a ton of effort in here.
Thank you 🙂 I prefer to analyze things carefully so it gets lengthy. If you liked this, check out the others too, they are all connected.
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awesome
commented very good analisys
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Great article, voted & s!
Very god!
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o7
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Great article
O7
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テスト ☯
lalalaaaaaa
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