The Chandaria Group is a family firm of Kenyan Asians who expanded their business first in Kenya and then abroad. P.P. Chandaria, the grandfather, moved to Kenya from India in 1914 and started business as a hawker. Between 1917 and 1940 business developed from hawking to retailing then to wholesaling in the 1930s. In the late 1920s, the family invested in elementary processing in tanning and wattle in Thika and in a small aluminium factory in Mombasa called Kenya Aluminium in 1929. Between 1940 and 1948, the Chandarias independently started a dhow passenger service between Jamnagar in India and Mombasa5. So far, we can see the Chandaria business had not diversified internationally in trade and distribution. However, this was to change in the 1948-1958 decade when the Chandarias made an explicit decision to move their financial and managerial resources in Kenya into manufacturing. In 1948, they set up Pure Food Products to make pasta for the Italian prisoners-of-war following the 2nd World War. The family soon after sold Pure Food Products in order to concentrate on Kenya Aluminium through which a whole range of aluminium products from household utensils, wire products to hurricane lamps were made. Between 1958 and 1970 is when the family diversified and expanded in Africa. This was after the take-over of East Africa Match Co. in which an integrated steel plant did all operations from furnaces to rolling and finishing and into the production of matches. This business shows diversification in production. The company is yet to open subsidiaries in war torn countries such as Somalia, Burundi among others citing reasons on the potential effects such might have on its cash flows. Explain why unfavorable economic or political conditions affect the MNCs cash flows, required rate of return, and valuation. (20 marks)