  The purpose of the study is to propose a methodology for evaluation and
ranking of risky investment projects.An investment certainty equivalence
approach dual to the conventional separation of riskless and risky
contributions based on cash flow certainty equivalence is introduced. Proposed
ranking of investment projects is based on gauging them with the Omega measure,
which is defined as the ratio of chances to obtain profit/return greater than
some critical (minimal acceptable) profitability over the chances to obtain the
profit/return less than the critical one.Detailed consideration of alternative
riskless investment is presented. Various performance measures characterizing
investment projects with a special focus on the role of reinvestment are
discussed. Relation between the proposed methodology and the conventional
approach based on utilization of risk-adjusted discount rate (RADR) is
discussed. Findings are supported with an illustrative example.The methodology
proposed can be used to rank projects of different nature, scale and lifespan.
In contrast to the conventional RADR approach for investment project
evaluation, in the proposed method a risk profile of a specific project is
explicitly analyzed in terms of appropriate performance measure distribution.
No ad-hoc assumption about suitable risk-premium is made.
