Upgraded to AndroidStudio v.4.0 now compile error

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As the title says I have upgraded to AndroidStudio v4.0 and now my project will not compile. I had errors and moved all my java files to the 'gen' folder and then project would show without errors.

I have set compiler to ECLIPSE.

Now I get this error:

Error:Module 'AndroidstudioProjects' production: java.lang.NoClassDefFoundError: com/android/resources/ResourceFolderType

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