Which type of device forwards packets based on their destination IP address?

The device responsible for forwarding packets based on their destination IP address is a router. Routers operate at Layer 3 of the OSI model, which is the network layer, and use IP addresses to determine the best path for traffic between different networks. When a packet arrives at a router, it inspects the destination IP address and makes forwarding decisions accordingly, ensuring that the packet is sent toward its intended destination across interconnected networks.

In contrast, switches operate primarily at Layer 2 of the OSI model and use MAC addresses to forward frames within the same local area network (LAN). Hubs are simple devices that broadcast incoming traffic to all ports without making any forwarding decisions based on address information. Firewalls, on the other hand, are network security devices that monitor and control incoming and outgoing network traffic but do not specifically forward packets based on destination IP addresses like a router does; their main function is to filter traffic according to defined security rules.

Thus, the correct answer focuses on the unique functionality of a router in packet forwarding based on IP addresses amidst the various roles played by other networking devices.