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Error: Cannot run lmutil.exe located under C:\Documents and Settings\...utilities

Error Message

When trying to install the ArcGIS License Manager, the following error message is displayed:

"Cannot run lmutil.exe located under C:\Documents and Settings\...utilities"

Cause

The installer is not able to run on this path.

Solution or Workaround

Change the user environment variables TMP and TEMP to C:\temp.
 

Instructions provided in the Knowledge Base article, How To: Edit an environment variable, describe how to edit environment variables for various platforms.