Appcompat errors in Eclipse - New Android Application

Few days ago I encountered an error while trying to start a 'New Android Application project' in Eclipse Kepler. It runs smoothly before (few months ago). it maybe caused by few updates made previously - I don't know which one.

Creating New Android Application.

Erros on Appcompat and my New Project - Mytest.

Suddenly Appcompat was generated automatically - WTF is Appcompat? Who cares - I don't - at least at this time. The MAJOR problem is my 'Hello world' project can't run anymore reporting 2 error messages:

1. Project 'appcompat_v7' is missing required source folder: 'gen'
2. The container 'Android Dependencies' references non existing library 'D:\xxx\EclipseWorkspace\appcompat_v7\bin\appcompat_v7.jar'

 To fix this.. just right click on Appcompat project and build it..

Build Appcompat Project
.

Output Generated after Build.

YES. As simple as that. Now I can build and run my New Project - 'Mytest' successfully! Yeay!

Mytest runs on AVD.

Does it work for you? Please leave a comment. Thanks.