Depreciation and profitability link (plant economics context): In financial reporting for a chemical process plant, depreciation refers to a reduction that results in a __________ in reported profit over time, given other factors remain the same.

Introduction / Context:
Depreciation is a cornerstone concept in chemical engineering plant economics. It allocates the capitalized cost of long-lived assets (reactors, heat exchangers, pumps, buildings) over their useful lives. Because depreciation is an expense in the income statement, it lowers reported accounting profit each period, even though it does not represent an immediate cash outflow.

Given Data / Assumptions:

• We consider standard financial accounting for an operating plant.
• Revenue and other costs are held constant to isolate the effect of depreciation.
• Depreciation methods (straight-line, declining-balance, sum-of-years' digits) are acceptable accounting practices.

Concept / Approach:
Profit (accounting) = Revenue − Total expenses. Total expenses include operating costs (materials, utilities, labor), overheads, and non-cash charges like depreciation. Introducing or increasing depreciation raises total expenses and therefore reduces reported profit. While depreciation reduces taxable income (and taxes), the immediate directional effect on profit before tax is negative.

Step-by-Step Solution:

Verification / Alternative check:
Compare two identical income statements, one with zero depreciation and the other with positive depreciation. The latter shows lower earnings before tax by exactly the depreciation amount.

Why Other Options Are Wrong:

Common Pitfalls:
Confusing cash flow with profit. Depreciation is non-cash; it lowers profit but may improve after-tax cash flow by reducing taxes. Also, do not confuse physical deterioration with the accounting allocation process.

Final Answer:
decrease