Quoting the documentation:
“There are two recommended ways of setting up testing on code and resources in a library project:
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You can set up a test project that instruments an application project that depends on the library project. You can then add tests to the project for library-specific features.
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You can set up a standard application project that depends on the library and put the instrumentation in that project. This lets you create a self-contained project that contains both the tests/instrumentations and the code to test.”