If the original volume is V, then the strength of the mixture after 4 l have been drawn and water added is (V-4)/V, the proportion of milk in the mixture. So the "attenuation factor", v, is (V-4)/V. (For example, if V=16 litres, then v=12/16=3/4, so the strength of the solution is 75% milk, 25% water, a ratio of 3:1.) The attenuation factor applies whenever the process is repeated. So after the first attenuation the amount of milk in solution is vV, and the amount of water V(1-v). So the ratio of milk to water is v(1-v). The next three attenuations the amount of milk in solution is v^4V, and the ratio of milk to water is now v^4/(1-v^4)=16/65, so 65v^4=16(1-v^4) and 81v^4=16, so v=2/3. But v=(V-4)/V=2/3, 3V-12=2V, so V=12 litres.