You have purchased a call option contract on Johnson & Johnson common stock. The option has an exercise price of $89.00, and J & Js stock currently trades at $90.43. The option premium is quoted at $2.17 per contract.

- Calculate your net profit on the option contract if J & Js stock price rises to $94.00 and you exercise the option. - Calculate your net profit on the option contract if J & Js stock price falls to $89.50 and you exercise the option. - If J & Js stock price falls to $89.50, show that it is more profitable to exercise than not exercise the option you have purchased.

[Please, justify your answers, and describe them within the formulas. Thank you! :)