Why is depreciation important when calculating cash flows?

Question $7$ options:

$1)$

Depreciation is a cash expense and must be subtracted from net income.

$2)$

Depreciation is a noncash expense and therefore must be added to net income. Tax savings result from the depreciation deduction.

$3)$

Depreciation indicates the level of debt within a firm.

$4)$

Depreciation is unimportant when calculating cash flows.