please can you go step by step so I can understand

5. Alpha Solutions enters into contracts with customers to provide a perpetual software license for $10,000 and one year of post-contract support (PCS) for $1,000, for a total sales price of $11,000. The: license and PCS are distinct performance obligations. The contracts include a customer option to renew PCS for an additional year for $800 (a 20% discount). Alpha Solutions concluded that the renewal option is a distinct performance obligation and represents a material right because it. originally sells for $1,000. Alpha Solutions also determined that both the perpetual license and PCS were sold at stand-alone selling prices and estimated that the customer has a 70 percent probability of renewing at the end of year 1,40 percent at the end of year 2 , and zero percent at the end of year 3. After year 3, Alpha estimates there is a zero percent probability of renewing. How much of the transaction price is allocated to the renewal option for the end of year 1 ? ( 1.5 points)