VMware Workstation 12.5: Windows Server 2016 Installation Error - Windows cannot find the Microsoft Software License Terms

The following error message is displayed when installing Windows Server 2016 Evaluation using VMware Workstation 12.5:

Windows cannot find the Microsoft Software License Terms. Make sure the installation sources are valid and restart the application.

This issue appears to be caused by VMware Workstation Easy Install.

To resolve:

Power off the virtual machine.
Edit the virtual machine and remove autoinst.flp from floppy drive (choose Use physical drive).
Power on and the installation should proceed as normal.
Install VMware Tools once the operating system installation has completed.

Alternatively, delete the virtual machine and create a new machine, choosing the option: I will install the operating system later.