On January 2,2017,Hi-Tech Master Construction,Inc.issued $500,000,ten-year bonds for $574,540.The bonds pay interest on June 30 and December 31.The face rate is 8%,and the market rate is 6%.The annual cash payment (paid in semiannual payments)on the bonds is

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The annual cash payment on the bonds is calculated based on the face value and the face rate. Since the face value is $500,000 and the face rate is 8%, the annual cash payment is 8% of $500,000, which equals $40,000. This amount is paid in semiannual payments, so each payment would be $20,000, but the total annual payment remains $40,000.