👉 Cumulative IOR, or Internal Rate of Return, is an investment metric that calculates the total expected return over the life of an investment, considering the time value of money. It represents the discount rate at which the net present value (NPV) of all cash flows from a project equals zero. In simpler terms, it's the rate at which the present value of future cash inflows equals the initial investment. By summing up the discounted values of all future cash flows, cumulative IOR provides a comprehensive measure of an investment's profitability over time, taking into account both the timing and magnitude of returns. This makes it a crucial tool for comparing different investment opportunities and making informed decisions in finance.
