ERROR: Unable to update the dependencies of the project in VS 2010 Setup project

This error happens due to many reasons but for me it worked when i opened the .vdproj file in Notepad and

1. Search for each reference which has the error in the file with ext .DLL

2. Goto SourcePath attribute and if the path of the dll is not mentioned then add the file path of the dll and save the file and recompile the project.

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