can someone explain the question and the solution

Can someone explain the highlighted part in solution? Why is hurdle rate applied on top of high water mark? Generally it is done only on the initial investment to find out eligibility of incentive fee..

This is a question from Candidate resource on AI Due diligence. I understand that in Direct Investing we need thorough due diligence due to absence of fund manager, but there is also a line in fund investing where we need ...

It is no where discuss during classes of AI so not able to understand. Can someone please explain?  

please explain. watermark is at 112 ? so for third year incentive fee will be calculated on amount exceeding 112 ?

please explain the solution

Q108 provide with solution

Can someone explain the steps for calculation this? Also, what is a catch up rate?