Soft selling occurs when a buyer is skeptical of the usefulness of a product and the seller offers to set a price that depends on realized value. For example, suppose a sales representative is trying to sell a company a new accounting system that will, with certainty, reduce costs by 10%. However, the customer has heard this claim before and believes there is only a 40% chance of actually realizing that cost reduction and a 60% chance of realizing no cost reduction.

Assume the customer has an initial total cost of $100.

According to the customer's beliefs, the expected value of the accounting system, or the expected reduction in cost, is_______________.

Suppose the sales representative initially offers the accounting system to the customer for a price of $7.00.