in this case select "Empty Apllication" under "Available Templates"
click "Finish"
a new "Application Project" named "demo" will be created in the "Project Explorer"
now you should right click the "demo" folder in "Project Explorer" and select "Project References";
now you should assure that "reference-TE0300_hw_platform" and "standalon_bsp_0" are both checked; if their box are not already checked, you should check them now;
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Application Project "demo" created and original .c and .h file are moved inside src subfolder
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Project References checking
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now the contents of "Project Explorer" should be this one below
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now you should copy the contents of the original demo (all .c and .h files from "TE0xxx-Reference-Designs\reference-TE0xxx\SDK\SDK_Workspace\demo\src" already moved in the temporary folder "C:\demo_src_TE") inside the folder "C:\XilinxProject\reference-TE0xxx\SDK\SDK_Workspace\demo\scr" as already do in the figure above;
now you should right click the select "demosrc" folder in "Project Explorer" > "demo", right click and select "Project ReferencesRefresh";
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Project References checking
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Application Project "demo" created and original .c and .h file are moved inside src subfolder