My application setup file has .NET Framework. What will happen when a PC already has lower or higher version of .NET framework? Will it replace the lower version with the higher version? If so will it notify a user before it does?
There is no "replace". All the versions of the framework coexist side by side. If the one you want isn't on the target system then how it actually gets installed depends on what you're doing, like using a setup&deployment prerequisites checker or just telling people to download and install the framework redistributable.