Introduction

What is critical thinking?

SAICA defines critical thinking as the ability of a student to “Research,

investigate, critically analyse, reflect and apply professional
judgement to the evaluation of data and information from a variety
of sources and perspectives (SAICA 2021).”

By similarity, Terblanche and De Clercq, (2021) suggested that critical thinking

“involves purposeful and reflective judgement generally aimed at making informed
decisions. It involves certain
 cognitive skills (e.g., the ability to interpret, analyse, evaluate, infer, explain and
self-regulate) and
 also, certain dispositions (e.g., being inquisitive, self-confident, open-minded,
ethical, orderly and systematic, and having intrinsic motivation and a positive
attitude)”.

Terblanche and De Clercq (2021) further developed a critical thinking competency

framework for accounting students that provides a comprehensive list of critical
thinking cognitive skills (attributes or abilities) and dispositions (habits of the mind) that
students need. Table 1 depicts these cognitive skills and dispositions.

Table 1: Critical thinking competency framework for accounting students

Terblanche and De Clercq (2021)
Cognitive skills (attributes or abilities) Dispositions (habits of the mind)
Interpretation/interpret Inquisitive
(clarification/clarify)
Analysis/analyse tries to be well-informed
Evaluation/evaluate Alert to opportunities to use critical
thinking
Making inferences/infer Trusts the processes of reasoned inquiry;
has faith in reason
Self-regulation/self-regulate Confident in own ability to reason or is
self-confident
Other: Open-minded about divergent world
 Good communication skills. views
 The ability to think outside the box.
 Pervasive skills (general).
 Ability to identify and deal with
ethical issues
Ability to envision a plan and its Fair-minded in appraising reasoning ; has
consequences intellectual courage, which involves a
willingness to face and fairly assess ideas
Change or convert the condition, Prudent in suspending, making or
nature, form or function of concepts in altering judgements
different contexts
Handle equivocation; take advantage Demonstrates clarity in stating the
of the ambiguity of a term to support a question or concern
position
Have a focus and pursue it (ability to Orderly in working with complexity
identify, attend to and keep track of a
focus)
Challenge assumptions Diligent in seeking relevant information
Deal with fallacy labels, for example Reasonable in selecting and applying
hearsay, bandwagon and appeal to criteria
authority
Deal with rhetorical strategies (strategies Takes care in focusing attention on the
that can be used to deceive) concern at hand
Ability to recall and understand (i.e. Persistent despite difficulties
lower-order thinking skills) the information
one is required to think about
Applies precision to the degree
permitted by the subject and the
circumstances / tries to ‘get it right’ to
the extent possible or feasible
Truth-seeking; seeks the truth through
sincere, honest processes, even if the
results are contrary to one’s assumptions
and beliefs [intellectual integrity]
Analytical; considers the whole situation,
including relationships, background and
environment relevant to a situation
[contextual perspective]
Intellectually inventive and can
generate, discover or restructure ideas;
imagine alternatives
Has an insightful sense of knowing
without conscious use of reason
Has intellectual empathy, which involves
a recognition of the need to put oneself
imaginatively in the place of others in
 order to understand them
Has intellectual good faith (integrity),
which involves a recognition of the need
to be true to one’s own thinking, to be
consistent in the intellectual standards
that one applies, and to hold oneself to
the same rigorous standards of evidence
and proof as those to which one holds
one’s antagonists
Ethical behaviour
Intrinsic motivation
A positive attitude

Some of the skills sets that support critical thinking such as communication,
collaboration (example – being able to work in a team) and self-directed or
independent learning were already addressed by the module. Other skills/behaviours
such as emotional intelligence will be addressed at postgraduate level and are
outside the scope of this module.

The outcomes that you need to achieve for this learning unit include:

1. apply a questioning mindset to identify and define an organisation’s

purpose/objective, problem.
2. differentiate between relevant and irrelevant information, weighing the accuracy
of information, challenging assumptions, and probing for detail
3. synthesise and make sense of information gathered to conceptualise alternative
courses of action to a problem, management decision or question
4. evaluate the likely impact of alternative courses of action and select the best
alternative to the problem, management decision or question
5. present the findings and recommendations that follow from the selected course
of action

SAICA requires students to be able to deliver a conclusion or decision for problems

that they will face as CA’s. Problems faced will require critical thinking skills. Thus,
critical thinking is taught through problem solving in CAS3701.

Critical thinking and problem-solving are often considered as one and

the same thing when in fact they are different. Critical thinking is a skill
requirement to solve problems.

Considering what problem-solving and critical thinking entails, CAS3701 will follow the
following problem-solving model. It is against this model that we will teach the skills
needed.
Table 2 – Problem solving model (developed by CAS3701)
ICON APPROACH
1. Identify and explain the issue/s or problem/s.
 What is the real question we are facing?

2. Analyse and critique the evidence provided.

 What are the facts that frame this problem?
 Differentiate between relevant and irrelevant
information.
 Weigh the accuracy of information.
 Challenge assumptions.
 Ask relevant probing questions.
 Research each issue pertaining to the problem.

3. Identify alternative courses of action.

 What are plausible options?
 Generate ideas and consider alternatives.

4. Evaluate the alternative courses of action.

 Evaluate the likely impact of alternative courses
of action and select the best alternative to the
problem.
 Why is this the best course of action?

5. Present your findings and recommendations.

 Present the findings and recommendations that
follow from the selected course of action.
 Communicate the decision to the client and/or
execute the chosen option.

Step 1:Identify and explain the problem / issue

What is a problem / issue

A problem applies to a question or difficulty calling for a

solution or causing concern (Merriam-Webster.com
Dictionary).

Based on the definition, it follows that we need to identify what is the difficulty or what
is it that is causing us concern so that we can find a solution to it and eventually, come
to a conclusion.
 ICON APPROACH
1. Identify and explain the issue/s or problem/s.

What is the real question we are facing?

Let us consider a few examples:

Example 1:
Q: A manufacturing company is experiencing a high rate of defects in its products.
Due to the defects in the products, the company is experiencing high return rates,
and negative publicity which affects the brand image of the company and ultimately
the company's bottom line.

What is the real problem? Is it, the defective product, the high return rates or the
negative brand image?

S: The real question we face: Why is the company experiencing a high rate of defects
in its products. If we could identify this “why” we can enhance product quality, reduce
defects, and maintain a positive brand image.

If we consider the problem further, the defects could arise from one of the following
issues:
1. problems during the manufacturing process such as incorrect assembly,
missing components, improperly calibrated machinery, or issues with parts
quality
2. Possible new suppliers that sell inferior component parts, etc.

Example 2:
Q: A software company is experiencing a high rate of customer complaints about the
usability of its product resulting in a decline in sales and profitability.

What is the real problem? Is it the customer complaints, or the decline in sales and
profitability?

S: The real question we face: Why are the customer’s complaining about the product?
The reasons for the complaints must be determined through analysis of feedback,
reasons for returns (if any), customer support calls made, etc.

Identifying the specific software areas causing problems and developing a plan to
improve the user experience is crucial for the company to address these usability
issues effectively, enhance customer satisfaction, and retain a loyal user base.
 Now try these for yourself:

Scenario 1:

TechNova Ltd is on the brink of launching their latest groundbreaking product, the
"EcoGadget X." This eco-friendly device promised to revolutionise sustainable living
with its cutting-edge technology and sleek design. However, as the launch date
approached, TechNova Ltd encountered a series of challenges that threatened the
success of their highly anticipated product.

Reliability concerns surfaced regarding the durability and performance of the

EcoGadget X. Reports of malfunctions and inconsistencies raised doubts about its
long-term functionality and quality.

What is the real problem that TechNova Ltd is facing?

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Scenario 2:

TechGear Ltd was a beacon of innovation led by CEO Alex Reynolds, a visionary
known for driving the company towards unprecedented success. As the company
geared up for the launch of their latest flagship device, the "TechMaster X," pressure
mounted on Alex and the senior management team to deliver stellar financial results
and impress investors.

Eager to meet aggressive revenue targets and secure a competitive edge, Alex
made strategic decisions to optimize financial performance and enhance market
positioning. Operational efficiencies were prioritised, resources strategically
allocated, and innovative marketing campaigns launched to drive sales and market
share growth.

However, amidst the dynamic environment at TechGear Ltd, subtle signs began to
emerge hinting at potential challenges within the company's operations. An air of
secrecy surrounded certain financial transactions, discrepancies in reporting
surfaced, and whispers of internal control bypasses circulated among employees.
What is the real problem that TechGear Ltd, is facing?

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There have been many real-life events that resulted in

company’s closing or facing insolvency. More recently
management fraud has been in the headlines as the reason
behind companies failing.
1

Read the following blog article for examples of real events:

https://thebalancingact.edublogs.org/category/ethical-
matters/

Step 2: Analyse and critique the evidence provided

We all have to make decisions on various aspects of life and ask questions. Suppose
that your doctor advises you that you need surgery for your knee. What would you
do?

Option A:
Agree with the doctor, after all he is the expert, and get the first available date and
time that you could do the surgery? OR

Option B:
Would you ask if there are alternative treatments? What would the repercussions be if
you did not go through with the surgery? What would be the recovery period? What
can you expect after the surgery? Perhaps, you even go as far as getting a second
opinion.

The point is do you just accept the opinion of the doctor or do you ask questions to
reach a decision? Asking questions , but the RIGHT questions are part of critical
thinking skills. The questions will be asked one at a time and at various points, perhaps.
Alone it may not mean much but together they are useful in making decisions.

Table 1 above suggests asking questions as a habit of mind – it is described as –

“Inquisitiveness”, “Truth-seeking” or ”Analytical; considers the whole situation,
including relationships, background and environment relevant to a situation
[contextual perspective]”. Questioning the evidence points to critical thinking.

1
Image by starline on Freepik
In addition, according to Brown and Keely (2007), the point of asking questions is to
gain a better understanding and critical thinking requires that
1. You ask interrelated and relevant questions
2. Ask questions at the appropriate time and
3. Have the desire to use the information

Step 2 is about asking questions and elaborates on the analysis and critique of
evidence we are provided with. The evidence often requires us to question what we
have been presented with. The items written in black in the block below elaborates
what we should consider when reflecting on what has been presented.

ICON APPROACH
2. Analyse and critique the evidence provided.

 What are the facts that frame this problem?

 Differentiate between relevant and irrelevant
information.
 Weigh the accuracy of information.
 Challenge assumptions.
 Ask relevant probing questions.
 Research each issue pertaining to the problem.

Let us consider an example:

Example 1:

Read the following opinion article on the state of the nation

address:
https://thebalancingact.edublogs.org/2024/03/05/budget-
highlights-for-students/

The blogger expresses in the post how the State of the Nation Address (SONA) affects
her students. In order for the blogger to be able to give an opinion at all, meant that
she had to:

1. Obtain knowledge (background to the SONA)

2. Determine what was actually conveyed in the president’s speech
3. Question whether the information is factual or a perception/opinion
of the president
4. Challenge whether President Ramaphosa’s recital of the story of
Tintswalo, the child of democracy, is accurate and a true reflection
of the country?
The work behind the blogger’s opinion, is her analysis and critique of the ‘evidence’-
namely, the SONA. Similarly, when confronted with a problem, you should be able to
ask the relevant questions before attempting to find a solution.

Asking the right questions requires active listening and participation. The importance
of active listening and what it entails was discussed in learning unit 2 – under the theme
– Communication.

In the video given (https://www.youtube.com/watch?v=D6-MIeRr1e8) the presenter

mentions four pointers when listening to information before asking questions. However,
in many situations you will be required to read rather than listen to the information
received. The medium of communication may be different, but the same questioning
attitude should be maintained. This means that if you are provided with a written
scenario, you can be an active participant by:

1. Writing notes for yourself (in the margins)

Notes can be questions that you may have or reasoning or an initial
evaluation of the information.
2. Asking yourself if the information makes sense?
3. Considering whether the presented information ties back to any
other information that may have been presented or is it ambiguous?
4. Reflecting if you have your own conclusion forming in your mind or
are you merely agreeing with what the writer has concluded on the
information.

Now try these for yourself:

Read the following opinion article by Nina Seega (Forbes,

25 March 2024)
https://www.forbes.com/sites/ninaseega/2024/03/25/the-
planet-is-going-bankrupt-human-survival-depends-on-
managing-climate-
risk/?ss=sustainability&sh=6898de9255bb

Analyse and/or critique the article. What questions will you ask yourself?

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 The following information was extracted from SAICA’s Initial
Test of Competence (ITC) Exam of June 2023. For the
information below a student had to discuss how the app
must be initially recognised and measured by Sun Foods in
terms of IFRS.

You are required to:

1. Identify what the real problem is and
2. Analyse and critique the information provided

Important – A solution is NOT required! When analysing you need to determine what
questions would you ask to resolve the problem?
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Beware of bias

Be aware of your own bias

When we analyse or critique, we bring our beliefs, training, culture, habits, even
emotions into play. Thus, it is important to try and be objective and not take things
personally. Criticism can be enriching and improve your learning ,etc if you take
it in the spirit intended and not as a personal attack – especially if someone else
has a different viewpoint to you.

Being aware of your own bias aligns with the following habits of mind in Table 1.
 Open-minded about divergent world views
 Fair-minded in appraising reasoning; has intellectual courage, which
involves a willingness to face and fairly assess ideas.

Step 3 - Identify alternative courses of action.

Life in general offers us various options for different situations. A simple example would
be – Buying milk from a grocery store. We have different brands to choose from, the
option of full cream, long life or even lactose-free for that matter. The point is that we
will consider or “identify” the alternatives available to us, evaluate the options (step 4
below) and make a decision on the best alternative (step 5)

Similarly, in any organisation or business, once we have determined the problem and
analysed and critiqued the information available to us, we should be able to then
consider what are our options (alternatives) to resolving the solution.

ICON APPROACH
3. Identify alternative courses of action.

 What are plausible options?

 Generate ideas and consider alternatives.
There are different ways in which we can identify alternatives. Examples include:
 Brainstorming ideas
 Mind mapping
 Seeking expert advice or opinion

Irrespective of how you go about it, what is important is that you do not reject or
accept the alternatives identified at this stage.

Let us consider an example:

The following example was adapted from the E&Y Foundation2

Time to buy a new car?

As a recent graduate with a degree in accounting, you have just begun working at the Washington &
Jefferson Accounting and Auditing Firm (W&J) in their Assurance practice. You are excited about finally
earning a pay check and starting your career! You’ve dreamed of this day for a long time, and you are
glad to finally put your well-earned education to use.

You have just been given your preliminary list of clients that you will serve. These clients are located in
different parts of the metropolitan area. At a recent meeting with your counsellor, a senior member of
the firm, he encouraged you to have a reliable and comfortable car, given the expectation of spending
a significant amount of time commuting and given the importance of getting to your client destinations
reliably. He also spoke of a new car he recently purchased and some exciting safety and efficiency
features that are available on the market today for new cars.

You currently drive a hand-me-down sedan from your family. The car is 15 years old, and its reliability
is in question. Last Friday, your car broke down and caused you to miss a fun evening with your friends.
The car also has no air conditioning. As the summers in the city are warm, and given that you will be
wearing business attire, you realize this will be very uncomfortable.

You currently live with two friends from college who are also starting their new jobs. This allows you to
save on rent expenses; however, your apartment is over 25 miles from W&J’s office.

You recently became engaged and are getting married one year from now. Both of you enjoy taking
road trips in your spare time and you are looking forward to continuing this lifestyle upon your marriage.
Your road trips have not been lavish, however. Your fiancé is pressuring you not to spend any money
so you can save for the costs of starting your new life together. Your fiancé is currently abroad and in a
different time zone, which makes timely communication more challenging.

After pondering the recommendation of your counsellor and knowing the challenges that your car might
bring, you decide that it’s time to consider buying a new car. After all, you want to come across as a
successful professional.

You sit down with your roommates and let them know that you think you need to buy a new car. Both
just purchased brand new cars. One purchased a flashy, sporty convertible. You’ve always dreamed
of having a new convertible — especially a red one! The other roommate purchased an economical
hybrid. Each thinks their car is great and they encourage you to get a new car too. They both purchased
their cars from Frank’s Autos and have had good service there.

2
(© 2012 Ernst & Young FoundaƟon (US). All Rights Reserved.SCORE No. MM4121D
Later that day you talked to your mom about buying a new car. Your mother has a new, sporty sedan
and thinks that you deserve a new car. She said she could easily put you in contact with the lender that
she used to finance her car. You asked her to speak to your father. She said he was busy at the moment
but that his opinion probably wouldn’t be worthwhile. He has a pickup truck that he has been driving
every day for the last 30 years.

On television, you recently saw a commercial for Frank’s Autos promoting a big sale of new cars through
the end of the month. Given that the end of the month was only a couple days away, you decided to
make your decision quickly. You feel that you obtained plenty of information necessary to know about
purchasing a new car, so you go ahead to the dealership. You plan to discuss your purchase with your
fiancé later this evening.

As you arrive at Frank’s Autos, you are greeted by Frank himself. You let him know that you are
considering buying a new car. He is thrilled and shows you around the lot. He asks you what you are
willing to spend and, because you have not done any cost analysis yet, you guess $40,000. He shows
you a new red convertible, which is in that price range. You sit in the car and fall in love with it. As you
step out of the car, Frank escorts you to his office to draw up the paperwork. However, you have a
moment of anxiety about deciding on the spot. Given that you know the sale lasts through tomorrow
and that you are expecting to speak with your fiancé in a few short hours, you ask Frank for his card
and schedule a follow-up meeting for the next day. Before you leave, though, you ask Frank for the
trade-in value of your car and an estimate for a tune-up and installation costs for air conditioning. Frank
provided you with an estimate of $2,000 for your trade-in and $2,000 for air conditioning installation.
As you speak to your fiancé that night, you enter a conversation about finances, which you expected.
Your fiancé initially challenges you about the costs of a new car and believes that you should strive for
a lower-cost option. This would mean keeping your existing car and not getting any air conditioning.
However, after further discussion, you mutually agreed to rule this out and establish a monthly budget
of $500, including fuel, for auto expenses.
You then follow up with your father and he encourages you to consider buying a practical, used car.
He explains that a significant amount of value is lost in a car within its first two years. He also mentions
that he is anxious for grandkids and that the possibility of a future family should be considered. You roll
your eyes and make sure that he knows it is not in your plans until several years into your marriage.

The following day, you speak with several professionals at the office, review ratings of dealerships
online and consult trade magazines. All this information indicates that Frank’s Autos typically has higher
pricing but provides good service. However, in the process, you identify three other reputable
dealerships with fair pricing and service. You also validate that $2,000 was a good trade-in value for
your car.
You then speak with the banker that your mother suggested, along with another banker located in your
building, and share your salary information and future plans. After confirming your employment and
salary, both bankers approve you for a loan of up to $20,000, at a current interest rate of 6% payable
over five years. Your monthly payments for that amount would be $386.66 per month.
The following weekend, as your fiancé just arrived home, you decide to go to the dealerships together
to look at cars, both new and used. In looking, you determine that you are unable to afford a new sporty,
red convertible. While you are disappointed, you understand that this is probably not a practical choice
for now.
Based upon your review of consumer feedback and anticipating that you will most likely have a family
within five years, you are looking for two types of makes and models in your search. One is a midsize
sedan manufactured by an American company. The other is a crossover Sport Utility Vehicle (SUV)
manufactured by a foreign company. Both options show expected costs for gently used, off-lease
vehicles in the cost range of $18,000 to $21,000.
Sales personnel from the dealerships are offering competitive pricing at $18,000 to buy the midsize
sedan and $21,000 to buy the SUV. They offer leasing rates for three years at a monthly amount of
$290 for the midsize sedan or $330 for the SUV, both with a down payment of $2,000.
Both cars that you are considering have 50,000-mile warranties with the option to purchase extended
warranties for about $1,500. The midsize sedan gets 23 miles to the gallon while the SUV only gets 17
miles to the gallon. You are expecting to drive about 12,000 miles per year, although half of this is
expected to be reimbursable mileage for work purposes. Currently, gas is $4.00 per gallon. The monthly
insurance costs are expected to be $66.67 for the midsize sedan and $83.33 for the SUV.
When you were discussing cars at the dealerships, they agreed to accept your current car as a trade-
in with a fair value of about $2,000.

You are required to:

1. Identify what the real problem is and
2. Analyse and critique the information provided
3. Identify alternative courses of action

Important – A solution is NOT required! When analysing you

need to determine what questions would you ask to resolve
the problem?

Solution:

1. What is the real problem?

You need to determine whether you should buy a new car or keep your existing car.

2. Analyse and critique the information provided

 What are the facts that frame this problem?
 Differentiate between relevant and irrelevant information.
 Weigh the accuracy of the information.
 Challenge assumptions.
 Ask relevant probing questions.
 Research each issue pertaining to the problem.

Facts:
 Your current car is old, not very reliable and does not have air conditioning.
You recently started your career at Washington & Jefferson and will be working
on a number of different audit clients throughout the metropolitan area for
which you will need to use a car. You also have an office commute of 25 miles,
for which you plan to drive. You also personally enjoy taking road trips.
 You have determined that you can afford to spend $500 per month on a car
and related expenses.
 You have arranged for financing of up to $20,000 for the purchase of a car at
a 6% annual interest rate.
 You have obtained pricing information from four reputable dealerships for both
purchase and lease options. You have also obtained a trade-in estimate of
$2,000 for your current car.
Differentiate between relevant and irrelevant information.
Relevant information for your decision:
 Budget of $500 monthly (agreed upon with fiancé)
 Lifestyle and employment information
 Insights from family, friends and co-workers provided well-rounded
perspectives on the best objectives in making this decision fit your lifestyle and
budget.
Irrelevant information for your decision:
 You are motivated to buy a new car and prefer a sporty convertible.
 What your friends, mother and counsellor have purchased is irrelevant.

Accuracy of information
 Information obtained from credible sources and is correct.

Challenge assumptions. The key assumptions are:

 Your current car is not ideal, and it is reasonable to consider buying a new car
within your budget. You can validate that your current car is very problematic
in terms of reliability and also due to a lack of air conditioning. These
assumptions have been also validated with your fiancé.
 Pricing and financing are fair. Dealerships are reputable and provided
comparable pricing and financing. Two loan estimates were obtained, and
comparable rates were offered.
 You intend to start a family within five years. This assumption was validated
through discussion with your fiancé.

Ask relevant probing questions

To address this issue, You also need to address additional questions that include:
 How much can you afford and what costs need to be considered?
 Should you buy or lease a used or new car?
 What is your current car needs versus “wants” today as compared to what
they will be a few years from now?
 What costs need to be considered?

Research each issue pertaining to the problem

 Conducted research on automotive websites and reviewing publications and
identified credible dealerships and two preferable makes and models.
 You have sufficient information regarding the ‘running costs’ of a car.
 Researched financing options and options of buying vs leasing

3. Identify alternative courses of action

 A reasonable outcome is to identify a car purchasing option within a monthly $500

budget that is agreed upon by your fiancé.
 It is possible to go above budget or to purchase a car that is not desired by your
fiancé; however, this would pose credit issues and potential marriage issues.
 Now try these for yourself:

The following information was extracted from SAICA’s Initial

Test of Competence (ITC) Exam of January 2022. The
student was required to:
Discuss the gross income consequences for Origins relating
to the Lajuba land sales made during the 2021 year of
assessment.
Ignore VAT.

Important – A solution is NOT required!

You are required to:

1. Identify what the real problem is,

2. Analyse and critique the information provided and
3. Identify alternative courses of action
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Step 4 - Evaluate the alternative courses of action.

Evaluating alternative courses of actions means that you should assess the options
available/ presented. For each alternative, you should consider:
 comparing or contrasting the strengths and weaknesses or advantages and
disadvantages of the alternatives.
 The possible challenges that could arise
 Obvious problematic areas
 Impact on all stakeholders
 Practicality of implementation of the alternative
 Resources available
 Ethical considerations
 Legal considerations
 Alignment of the alternative with the organisation/business’s values and missions
statement
 Etc.

Evaluation of the alternatives also involves assessing the impact of each alternative.
The impact of alternatives can affect anything from profits, financing, the
organisation’s brand or reputation and also the community in which the organisation
operates. The impact of the organisation’s contribution to the SDG’s are also
important.
 ICON APPROACH
4. Evaluate the alternative courses of action.

 Evaluate the likely impact of alternative courses

of action and select the best alternative to the
problem.
 Why is this the best course of action?

After evaluating the alternatives, the best course of action (alternative) must be
chosen. The decision on the best alternative, in your opinion, should have a
logical/reasonable justification with supporting evidence for your choice made.

Let us relook at the example: Time to buy a new car?

(Adapted from the E&Y Foundation3).

You are required to:

4. Evaluate the alternative courses of actions

Assume the following additional information is provided to you:

3
(© 2012 Ernst & Young FoundaƟon (US). All Rights Reserved.SCORE No. MM4121D
 You have prepared the following car comparison analysis:

Buy Lease
Midsize Midsize
over over
Midsize (under) Midsize (under)
Car comparison analysis sedan SUV SUV sedan SUV SUV

Purchase price $18,000.00 $21,000.00 $(3,000.00) $18,000.00 $21,000.00 ($3,000.00)

Trade-in value of current car (2,000.00) (2,000.00) (2,000.00) (2,000.00)

Cost to be financed or leased $16,000.00 $19,000.00 $(3,000.00) $16,000.00 $19,000.00 ($3,000.00)

Monthly payments if purchased
and financed at 6%, payable
over 60 months $309.32 $367.32 ($58.00)
Monthly costs if leased $290.00 $330.00 ($40.00)
Monthly fuel costs (500 miles
per month, $4.00 per gallon;
midsize at 23 miles per gallon
and SUV at 17 miles per
gallon) 86.96 117.65 (30.69) 86.96 117.65 (30.69)
Monthly insurance 66.67 83.33 (16.66) 66.67 83.33 (16.66)
Total monthly cost $462.95 $568.30 ($105.35) $443.63 $530.98 (87.35)
Estimated fair value at end of
three years $ 9,216.00 $10,760.00 ($1,544.00)

Solution:
Evaluation of alternatives
Based on performing a car comparison analysis, the SUV buy, or lease options are
both in excess of your budget. The midsize sedan buy or lease options are both within
your budget. Additionally, as the buy option would provide you value at the end of
three years that would be much more significant than the savings generated by the
lease option, this seems to be the best choice.

Select the best course of action

The alternative to purchase the midsize sedan is considered the best.
Reason: Besides the purchase being within your budget agreed upon with your
fiancé, it aligns with your lifestyle and employment needs, both currently and for the
immediate future. It is not necessary to fulfil your lifelong dream to own a sporty, red
convertible at this time.

Now try these for yourself:

You are required to use the same information provided re:

SAICA January 2022 ITC Exam – Lajuba Land.
You are required to:
4. Evaluate the alternative courses of actions
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Step 5 - Present your findings and recommendations.

ICON APPROACH
5. Present your findings and recommendations.

 Present the findings and recommendations that

follow from the selected course of action.
 Communicate the decision to the client and/or
execute the chosen option.

When presenting your findings and recommendations, ensure that the

communication medium is appropriate, and the tone of the presentation/report is
suitable.

Ensure that you understand and can explain the process you followed to arrive at a
conclusion. Clients or managers will ask you questions and challenge your
assumptions, decisions for different variables used, etc and you should be able to
defend that decision.

In a real-life situation, if the option presented is approved, the audience may expect
that you have a plan to practically implement the decision and this possibility must be
considered and prepared for. Alternatively, the decision could be rejected outright
or approved with conditions and then you should also be adaptable and flexible to
consider how your choices can be modified to satisfy the client.

On that note, I remind you again that in order to be good at solving problems you
need to think critically and if it could be summed up in one sentence: Critical thinking
is the skills required to solve problems and is not problem-solving.

Finally, problems do not take place in isolation and will impact various areas and thus
you should be able to solve a problem considering issues in the various disciplines you
have studied. The practice activities illustrate the problem-solving model but also
integrates the disciplines.