An upfront investment is an initial expenditure made at the beginning of a project or business venture. It represents the cost required to start or implement something new.
Related terms
Return on Investment (ROI): A measure used to evaluate the efficiency or profitability of an investment. ROI compares the gain from an investment relative to its cost.
Fixed Costs: Costs that remain constant regardless of how much is produced or sold. For example, if you invest in machinery for your business, those costs are fixed and don't change with production levels.
Depreciation: The gradual decrease in value of assets over time due to wear and tear or becoming obsolete. When calculating upfront investments' return, it's essential to consider depreciation as it affects asset values.