If you do not specify a path to the image,
AutoCAD Raster Design toolset searches for the image using the
Project Files Search Path configured in the AutoCAD
Preferences dialog box. For more information, open the main product Help window for AutoCAD, then expand
AutoCAD User’s Guide
Explore the User Interface
Set Up the Drawing Environment
About Setting Up the Drawing Area.
AutoCAD Raster Design toolset searches for the image in the path that you specify. If AutoCAD Raster Design toolset cannot locate the image in this path, it searches for the image using the AutoCAD Project Files Search Path.