My product.wxs is like below

<?xml version="1.0" encoding="UTF-8"?>
<Wix xmlns="http://schemas.microsoft.com/wix/2006/wi"
     xmlns:Util="http://schemas.microsoft.com/wix/UtilExtension">
  <Product Id="*" Name="FileDeletionRecordServiceSetup" Language="1033" Version="1.0.0.0" Manufacturer="HP GIS" UpgradeCode="7ec63c63-ad12-4cc7-bf7e-138caa10380f">
    <Package InstallerVersion="200" Compressed="yes" InstallScope="perMachine" />

    <MajorUpgrade DowngradeErrorMessage="A newer version of [ProductName] is already installed." />
    <MediaTemplate EmbedCab="yes" />

    <Feature Id="ProductFeature" Title="FileDeletionRecordServiceSetup" Level="1">
      <ComponentGroupRef Id="ProductComponents" />
      <ComponentGroupRef Id='svcComponents' />
    </Feature>

    <UI>
      <UIRef Id="WixUI_InstallDir" />
    </UI>
    <Property Id="WIXUI_INSTALLDIR" Value="INSTALLFOLDER" />
    <Property Id="INSTALLFOLDER" Secure="yes" />
  </Product>

  <Fragment>
    <Directory Id="TARGETDIR" Name="SourceDir">
      <Directory Id="ProgramFilesFolder">
        <Directory Id="INSTALLFOLDER" Name="FileDeletionRecordService" />
      </Directory>
    </Directory>
  </Fragment>

  <Fragment>
    <ComponentGroup Id='svcComponents' Directory="INSTALLFOLDER">
      <Component Id="svcInstallation" Guid="{05F58B9B-BC8F-44BD-A4D1-DB4B8F824111}">
        <File Id="FileDeletionRecordServiceEXE" Source="[INSTALLFOLDER]FileDeletionRecordService.exe" />
        <ServiceInstall
          Id="ServiceInstaller"
          Type="ownProcess"
          Name="FileDeletionRecordService"
          DisplayName="FileDeletionRecordService"
          Description="Record file deletion for specified directory"
          Start="auto"
          Account="NT AUTHORITYLocalService"
          ErrorControl="normal"
      />
        <ServiceControl Id="StartService" Start="install" Stop="both" Remove="uninstall" Name="FileDeletionRecordService" Wait="yes" />
      </Component>

      <Component Id="cmpEventLog" Guid="{D15001E4-24F7-407E-977B-47A1B1F0B4B4}" KeyPath="yes" >
        <Util:EventSource
         Name="FileDeletionRecordSource"
         Log="FileDeletionRecordService"
         EventMessageFile="%SystemRoot%Microsoft.NETFrameworkv2.0.50727EventLogMessages.dll" />
      </Component>
    </ComponentGroup>
  </Fragment>
</Wix>

In above I use UIRef WixUI_InstallDir to get value for INSTALLFOLDER.
And I use it for the windows service exe that I would like to install

  <File Id="FileDeletionRecordServiceEXE" Source="[INSTALLFOLDER]FileDeletionRecordService.exe" />
  <ServiceInstall
    Id="ServiceInstaller"
    Type="ownProcess"
    Name="FileDeletionRecordService"
    DisplayName="FileDeletionRecordService"
    Description="Record file deletion for specified directory"
    Start="auto"
    Account="NT AUTHORITYLocalService"
    ErrorControl="normal"
/>

But it shows

The system cannot find the file
‘[INSTALLFOLDER]FileDeletionRecordService.exe’.

Error when I was trying to build the project.
The part confuse me is, of course the file should not exist yet cause it has not been installed yet. But I need to install service from ‘[INSTALLFOLDER]FileDeletionRecordService.exe’ for sure.

Does that mean I should create the directories, move the files and install the service manually first so to create the setup pack? Is this the practice? Cause I feel it doesn’t make sense I think there are some usages I misunderstood but not sure what I did wrong.