How does depreciation affect the cash flow in a tax-paying company? I came across a question in first year's finance book.The question is: 

For a tax-paying firm, an increase in ______will cause the cash flow from assets to increase.

A. Change in net working capital
B. Production costs
C. Depreciation
D. Taxes
E. Net capital spending

C is the right answer, however I am not clear why depreciation increase the cash flow. Thanks for your help.
Depreciation is tax-deductible. The firm in question pays taxes. If depreciation increases, then taxes paid decrease. If taxes paid decrease, then cash flow increases. ceteris paribus