Help with Exam Kit Question on Investment

I am struggling to understand the answer to this question and wondered if you could help? Q An electric motor for a passenger ferry costs £20,000 and can be replaced either annually or after 2 years. If the motor is replaced after 2 years, the scrap value falls from £16,000 to £13,000 and running costs rise from £5,000 in year 1 to £5,500 in year 2. Assuming the owner of the ferry uses a cost of capital of 10% and the 2 year cumulative discount factor is 1.736, calculate the equivalent annual cost (EAC) of the 2 year option in absolute terms. The answer they give is ; NPV= -£20,000 -(5,000/1.1) - (£5,500 / [1.1 x1.1] ) + (£13,000/ [ 1.1 x1.1] ) = -18347 EAC in absolute terms ie no +ve or -ve signs = 18347/1.736 = £10,569 I do not understand why they have divided the figures by 1.1 and then at the end used the discount factor of 10% for 2 years. I did an normal NPV calculation Year 0 (20,000) DF 1 (20,0000) Year 1 (5,000) DF 0.909 (4545) Year 2 (5,500) DF 0.826 (4543) Year 2 13,000 DF 0.826 10738 ________ Total (18350) Which is similar to their answer before they discounted it again