AppCompatActivity is not assignable to Activity

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After a year of coding in android and everything working perfectly till yesterday. Today, I found something really strange after upgrading to gradle 3 alpha 2 and studio 3 build 2.

This is the declaration of one of the activities throwing error: This

This is the activity code: This

What is wrong?

EDIT

appcompat dependency:

  compile 'com.android.support:appcompat-v7:23.2.1'
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