What is one way corporations can take advantage of depreciation for tax purposes?

Depreciation allows corporations to spread the cost of a tangible asset over its useful life for tax purposes. This is beneficial because it enables the company to reduce its taxable income gradually rather than expensing the total cost in a single year. By doing so, the corporation can effectively manage its cash flow and tax liabilities, as it will not face a significant tax burden in the year of purchase. By allocating the cost of assets in this manner, corporations can take advantage of tax deductions associated with the depreciation expense, allowing them to free up cash for other business operations or investments.

Other options, such as delaying asset purchases, maintaining high inventory levels, or making arbitrary reductions in revenue, do not correlate with the strategic use of depreciation for tax benefits and may even hinder a corporation's operational efficiency and financial health.