A private equity fund has a hard hurdle rate of $15\%.$ The fund has a net asset value of $$150$ million and has generated a net return of $$20$ million.

The private equity firm charges a $20\%$ performance fee on returns

above the hurdle rate. What is the amount of performance fees that the private equity firm is

entitled to receive?

A SO

B $$400,000$

$$1\mathrm{.}2$ million

$$2\mathrm{.}0$ million