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To reduce the file size of a 26 megabyte file, images can be compressed in Microsoft Word. This can be done by selecting a picture, clicking on the picture format tab, and choosing to compress pictures. Options include selecting the image quality and deleting cropped areas to further reduce the size. Alternatively, the file size can be reduced by clicking on file, selecting compress pictures, and choosing to compress all pictures in the file. Once the changes are saved, the file size should decrease.