dependencies - https://proandroiddev.com/unit-tests-with-dagger2-retrofit2-rxjava2-and-mockk-android-1c268fa77957

build.gradle

apply plugin: 'com.android.application'

apply plugin: 'kotlin-android'

apply plugin: 'kotlin-android-extensions'

apply plugin: 'kotlin-kapt'

android {
    compileSdkVersion rootProject.compileSdkVersion
    defaultConfig {
        applicationId "com.audhil.medium.gweatherapp"
        minSdkVersion rootProject.minSdkVersion
        targetSdkVersion rootProject.targetSdkVersion
        versionCode 1
        versionName "1.0"
        
        //  for Instrumentation test cases
        testInstrumentationRunner "com.audhil.medium.gweatherapp.runner.UiRunner"
    }
    buildTypes {
        release {
            minifyEnabled false
            proguardFiles getDefaultProguardFile('proguard-android-optimize.txt'), 'proguard-rules.pro'
        }
    }

    dataBinding {
        enabled = true
    }

    //  for testing
    compileOptions {
        sourceCompatibility 1.8
        targetCompatibility 1.8
    }
}

dependencies {
    implementation fileTree(dir: 'libs', include: ['*.jar'])

    //  dagger 2
    implementation 'com.google.dagger:dagger:' + rootProject.dagger2Version
    
    //  dagger 2
    kapt 'com.google.dagger:dagger-compiler:' + rootProject.dagger2Version

    //  to build TestComponent in test/ folder
    kaptTest 'com.google.dagger:dagger-compiler:' + rootProject.dagger2Version

    testImplementation 'junit:junit:' + rootProject.jUnitVersion,
            'android.arch.core:core-testing:' + rootProject.archCoreVersion

    androidTestImplementation 'androidx.test.ext:junit:' + rootProject.extTestRunnerVersion,
            'androidx.test:rules:' + rootProject.testRunnerVersion,
            'androidx.test.espresso:espresso-core:' + rootProject.espressoVersion

    androidTestImplementation('com.squareup.okhttp3:mockwebserver:' + rootProject.mockWebServerVersion) {
        exclude group: "com.squareup.okhttp3"
    }

    //  mockk
    testImplementation 'io.mockk:mockk:' + rootProject.mockKVersion
}

ext {
    minSdkVersion = 16
    targetSdkVersion = 28
    compileSdkVersion = 28

    jUnitVersion = "4.12"
    espressoVersion = '3.1.1'
    testRunnerVersion = '1.1.1'

    extTestRunnerVersion = '1.1.0'
    mockWebServerVersion = '3.14.2'

    dagger2Version = '2.21'
    
    archCoreVersion = '1.1.1'
    
    mockKVersion = '1.9.3'
}