AbstractThe arbitrary character of such concepts as“Discounted Present Worth”, which are often advocated as methods of assessing and comparing investment opportunities, is discussed in Part 1 of this paper. It is also pointed out that, by their nature, these concepts are not particularly well adapted to situations in which“risk”is an important factor. In order to develop a method in which a logical approach to risk can be adopted, an understanding of the basic problem of Decision Making under Uncertainty is required. An introduction to this subject forms Part 2 of this paper. In Part 3 the problem of Plant Investment under Risk is considered, and a rational approach to this is developed. The importance of the“portfolio”concept in such problems is particularly demonstrated.