Depreciation calculation approaches: Which of the following methods do not incorporate interest on investment when computing depreciation?

Introduction / Context:
Depreciation allocates asset cost over useful life. Some accounting methods conceptually relate to interest, but the depreciation charge itself typically excludes explicit interest on invested capital, which is handled separately as financing cost or opportunity cost.

Given Data / Assumptions:

• Standard textbook definitions in plant economics.
• We consider the depreciation expense calculation, not the total annualized cost including interest.
• Methods cited: present worth, sinking fund, sum-of-the-years’ digits (SOYD).

Concept / Approach:
SOYD and other accelerated methods allocate book value declines based on predefined schedules; they do not embed interest on investment. Sinking fund uses an assumed interest rate to accumulate funds, but the depreciation charge is still a schedule of set-aside amounts; the interest notion here pertains to fund growth, not adding interest as a separate expense into the depreciation figure. Similarly, present worth relates to discounting cash flows but does not mix interest into the depreciation expense line in typical accounting.

Step-by-Step Solution:

Verification / Alternative check:
Compare annualized cost analyses where interest is a separate term versus depreciation schedules which change book value but do not include interest as an expense within “depreciation.”

Why Other Options Are Wrong:

Common Pitfalls:
Confusing “uses an interest rate assumption” (for fund accrual or discounting) with “charges interest as part of depreciation expense.” These are distinct.

Final Answer:
All (a), (b) and (c)