Depreciation reduces profit on the income statement but **no cash actually leaves the company** — that's why it gets added back in the Operating Activities section of the cash flow statement.

The other traps:

- **A)** Land is **never depreciated** — it doesn't wear out
- **B)** Depreciation is explicitly a **non-cash** expense
- **D)** That describes the **declining-balance method** — straight-line is equal every year