👉 The "iOR" formula, often used in financial contexts, is a simplified method for calculating the internal rate of return (IRR) on an investment or project. It's derived from the concept that the IRR is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero. The formula is typically expressed as: \[ \text{iOR} = \left( \frac{1 + \frac{C_1}{r} + \frac{C_2}{r^2} + \ldots + \frac{C_n}{r^n}}{1 - \frac{C_1}{r} - \frac{C_2}{r^2} - \ldots - \frac{C_n}{r^n}} \right)^{1/r} \] Here, \( C_t \) represents the cash flow at time \( t \), \( r \) is the discount rate (or IRR), and \( n \) is the number of periods. This formula helps investors and analysts quickly estimate the profitability of an investment by finding the rate that balances the present value of future cash inflows and outflows, providing a single, comprehensive return metric.
