Through investment projects, companies wish to create a profit or benefits in the future. In order for management or owners of companies to decide on a certain investment project it must first be evaluated. Evaluation of an investment project is also welcome if management or owners have doubts between two or more investment proposals. Evaluation of an investment project is done through methods of financial decision making. Most important methods of financial decision making are net present value and internal rate of return. But it is not enough to calculate these two methods, especially if it is a matter of a small and private company where the most important method of financial decision making is discounted pay-off period method as owners of such companies are mostly interested in when their invested funds will return with coverage of required profitability rate. In order to be able to apply methods of financial decision making, or to evaluate a project, it is necessary to determine the amount of investment expenses, net cash flows for each year of the life cycle of the project and terminal value. Most often, the net cash flows are reduced to present value through discounting. Discount rate which is used for discounting of cash flows is a cost of capital. Due to uncertain future, during the evaluation of an investment project it is necessary to include risks, especially systemic or market risk on which a company has no means of influencing or avoiding. Considering that not all investment projects have equal risks it is necessary to apply techniques of individual risks. Accordingly, not all investment projects can be discounted at the same rate as that would assume that risks do not change in the conditions of the real world. Therefore, the discount rate is adjusted according to the relevant market risk profile of the investment project which is called risk adjusted discount rate.