What are the differences between ROR and IRR and how do they impact investment decisions?

The main difference between ROR (Rate of Return) and IRR (Internal Rate of Return) is that ROR calculates the overall return on an investment, while IRR calculates the rate at which the net present value of cash flows equals zero.

ROR is a simpler measure that shows the total return on an investment, while IRR takes into account the timing of cash flows and provides a more accurate measure of the investment's profitability.

When making investment decisions, ROR helps investors understand the total return they can expect, while IRR helps in comparing different investment options by considering the time value of money. Investors often use both metrics to evaluate the potential returns and risks of an investment.