The method that calculates the ratio of the present value of the positive cash flows of a project to the absolute value of the present value of the negative cash flows is called the:

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The method described is the profitability index, which is calculated by dividing the present value of the positive cash flows by the absolute value of the present value of the negative cash flows. This ratio provides a measure of the amount of value created by a project per unit of investment. The higher the profitability index, the more value created per unit of investment. Therefore, the profitability index can be used as a decision-making tool for evaluating projects and selecting the ones that are expected to create the most value. The other options listed are common methods for evaluating investment opportunities, but they do not specifically use the ratio of positive to negative cash flows.

The Method That Calculates the Ratio of the Present Value