We notice that the polynomial can be rearranged as:
\[ P(x) = (x^4 - 2x^3) + (8x - 16) \]
Now, factor out the common terms from each group:
\[ P(x) = x^3(x - 2) + 8(x - 2) \]
Next, factor out the common binomial factor \((x - 2)\):
\[ P(x) = (x^3 + 8)(x - 2)
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