Any help with this question would be appreciated, thanks!

I mostly need help with finding the answer to the red mark area.

Leonard, a company that manufactures explosion-proof motors, is considering two alternatives for expanding its international export capacity. Option 1 requires equipment purchases of $895,000 now and $595,000 two years from now, with annual M\&O costs of $52,000 in years 1 through 10. Option 2 involves subcontracting some of the production at costs of $290,000 per year beginning now through the end of year 10. Neither option will have a significant salvage value. Use a present worth analysis to determine which option is more attractive at the company's MARR of 16% per year. The present worth of option 1 is $ x and that of option 2 is $ Option is more attractive