C:\Windows\Microsoft.NET\Framework64\v4.0.30319>InstallUtil.exe C:\_PRODUKCIJA\D
ebug\DynamicHtmlTool.exe
Microsoft(R).NET FrameworkInstallation utility Version4.0.30319.1
Copyright(c)MicrosoftCorporation.  All rights reserved.

Exception occurred while initializing the installation:
System.BadImageFormatException:Could not load file or assembly ‘file:///C:\_PRO
DUKCIJA\Debug\DynamicHtmlTool.exe‘ or one of its dependencies.An attempt was ma
de to load a program with an incorrect format..

C:\Windows\Microsoft.NET\Framework64\v4.0.30319>

I seems that you are using the 64-bit version of the tool to install a 32-bit application. Look for the 32-bit version of the tool here:

C:\Windows\Microsoft.NET\Framework\v4.0.30319