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I have created a formula field to show the link to a record. It gives no error when I am trying it over different record, but whenever I go for the same link which is present on a dashboard, it throws an error states : URL no longer exists.

Can anyone help me with this?

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Hyperlinks are of two types either relative or absolute. It seems that for your case it is a relative URL. So, to link a record you can simply prepending a slash("/") to the ID. Prefer this example:

HYPERLINK("/" & Id, "test")

I hope this will work.

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