Probabilites in finance: partnership in 4-12 months, versus

kelliebellie32

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Oct 16, 2007
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Harpaz(the CEO) believed there was about a 75% chance that Purinex would secure a partnership with a pharmaceutical company for either sepsis or diabetes sometime during the next 4-12 months. If that partnership occurred, he estimated a 60% probability that it would be a deal for sepsis. If a partnership did not occur during the next 4-12 months, Harpaz believed there was a very strong chance-perhaps a 95% probability- that a different partnership with a third company for the diabetes application would occur about a year later.

What I have done:
75%(60%)= 45% probability that a sepsis partnership will happen in 4-12 months
75%(100%-60%)= 30% that a diabetes partnership will happen in 4-12 months

What I don't understand how to do:
Is there a way to find the total probability of all three partnerships? I tried multiplying the 75% by 95% but that doesn't seem right because it is a lower value than both of those numbers. I am trying to find the total percentage so that I can calculate the average net present value of securing any deal.

Thank you!
 
Harpaz(the CEO) believed there was about a 75% chance that Purinex would secure a partnership with a pharmaceutical company for either sepsis or diabetes sometime during the next 4-12 months. If that partnership occurred, he estimated a 60% probability that it would be a deal for sepsis. If a partnership did not occur during the next 4-12 months, Harpaz believed there was a very strong chance-perhaps a 95% probability- that a different partnership with a third company for the diabetes application would occur about a year later.

What I have done:
75%(60%)= 45% probability that a sepsis partnership will happen in 4-12 months
75%(100%-60%)= 30% that a diabetes partnership will happen in 4-12 months

What I don't understand how to do:
Is there a way to find the total probability of all three partnerships? I tried multiplying the 75% by 95% but that doesn't seem right because it is a lower value than both of those numbers. I am trying to find the total percentage so that I can calculate the average net present value of securing any deal.

How about:

(100%-75%)(95%) = 23.75% chance of a diabetes deal in about a year?
 
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