Intercontinental (IHG) is considering building a new $2 million hotel in Ithaca. This new hotel is expected to generate after-tax cash flows of $280,000 per year forever. The tax rate is 32%. THG's stock has a required return of 20% and its bonds have a required return of 8%. Issuance costs are 7% for stock and 3% for bonds. IHG's target D/E ratio is 100%. 1. What is IHG'S WACC? 2. What is IHG's average flotation cost? 3. What is the NPV of IHG's new hotel project