This is unclear. Is it a single, initial cost or a cost somehow spread over the 10 years?
"Annual fixed cost including depreciation - $555,000 "
Kind of an irritating hint. Get the depreciation out of there and track it separately.
"Annual variable costs $40,000"
That's just plain silly. You're using a level assumption for "variable" costs?
You reported no salvage value, so Straight Line Depreciation is trivial.
$1,850,000/10 = $185,000 = Annual Depreciation
This makes other fixed annual costs $555,000 - $185,000 = $370,000
Well, line it all up in a spreadsheet, calculate the taxes, and calculate the present value.
The other investment if far simpler. Let's see what you get.