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OS X Can't be installed on this disk (errors)

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I have a VM of an older Mac, running OS X 10.7 that I want to update to Yosemite.   This VM was converted from a physical system and it has three "disks" with it.  

 

Unfortunately, the root disk that boots, which has plenty of free space, the Yosemite installer insists I cannot install OS X on it.  Though, it will happily install on one of the other disk images (I tested and booted off it).  

 

This sounds like a setting or something (I hope) that I can fix.  I've not run into this before and I wonder if there is a workaround for this problem.

 


Thanks!


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