Para Fuel – Sept 22

Greetings,

I came across this question from the kaplan revision kit for Investment appraisal with real option in Para Fuel Co.

The exhibits mentions that and i quote “An estimate has been made of the discounted value of post-tax cash flows for years 5 to 25. This totals $5.40m at the start of year 5” for investment A
and the answer in the appendix shows the calculation as ‘Present value of cash flows for years 5 to 25 ($000s): 5,400 × 1.12–4 = 3,432’

Here I fail to understand that the exhibit mentions it as discounted value of post tax cash then why do we have recalculate with the discount factor of 12% at year 4.

Please help.