Dear sajivkacker: You and your wife should discuss with her oncologist whether genetic counseling and testing might be an appropriate direction for her. If your wife decides to get tested and she is positive, then it is reasonable to have your daughter tested. If your wife is negative, there is no need to test your daughter.
Her chance is 50 %, IF your wife has the mutation. Your wife would need to be tested first to see what mutation she has, then when your daughter is at least 21, she should undergo the genetic counseling and the blood test...IF SHE wants to.
I've seen families where the BRCA mutation is 1 out of 5 siblings being positive and I've also seen it where all siblings are positive. I've seen it skip generations (of those that have tested) and I've heard of Doctors saying that they can't get mutation from Dad and of course, they can. Mom doesn't have to have it for the daughter to have it. I agree that anyone in the family who has already had cancer should have the test first because then they know what mutation to look for and that makes the test cheaper as well. She can test at 18. Again, if she wants to.
And, a BRCA negative result doesn't mean she can't/won't get cancer since there are two direct generations with BC. It also doesn't mean she WILL get cancer either.
I really strongly suggest your wife meet with a genetic counselor who can help her make decisions and understand risks both hereditary and other. And whatever you do, do NOT throw all of this at your daughter please... being 18 is difficult enough... again, a genetic counselor will help with that conversation.
Get armed but not crazy :)