Concept:
We use the method of integration by parts (\( \int u \, dv = u v - \int v \, du \)) twice, selecting the logarithmic term as \( u \) according to the ILATE rule.
Step 1: First round of integration by parts.
Let \( u = (\log x)^2 \implies du = 2\log x \cdot \frac{1}{x} dx \).
Let \( dv = x \, dx \implies v = \frac{x^2}{2} \).
\[
F(x) = \frac{x^2}{2}(\log x)^2 - \int \frac{x^2}{2} \cdot \left(\frac{2\log x}{x}\right) dx = \frac{x^2}{2}(\log x)^2 - \int x\log x \, dx
\]
Step 2: Second round of integration by parts.
For \( \int x\log x \, dx \), let \( u = \log x \implies du = \frac{1}{x} dx \), and \( dv = x \, dx \implies v = \frac{x^2}{2} \):
\[
\int x\log x \, dx = \frac{x^2}{2}\log x - \int \frac{x^2}{2} \cdot \frac{1}{x} dx = \frac{x^2}{2}\log x - \frac{x^2}{4}
\]
Combining everything together:
\[
F(x) = \frac{x^2}{2}(\log x)^2 - \frac{x^2}{2}\log x + \frac{x^2}{4} + C
\]
Step 3: Using the boundary condition to find constant \( C \).
We are given \( F(e) = \frac{e^2}{4} \). Substitute \( x = e \):
\[
\frac{e^2}{4} = \frac{e^2}{2}(1)^2 - \frac{e^2}{2}(1) + \frac{e^2}{4} + C \implies \frac{e^2}{4} = \frac{e^2}{4} + C \implies C = 0
\]
Step 4: Evaluating \( F(1) \).
Substitute \( x = 1 \) into the fully determined expression (noting that \( \log 1 = 0 \)):
\[
F(1) = 0 - 0 + \frac{1^2}{4} = \frac{1}{4}
\]
This matches option (B) perfectly.