Error when starting ASP.NET Core web app: "Unable to start dotnet.exe. The system cannot find the file specified."

Question

I have downloaded Visual Studio 2017 RC. I create a default ASP.NET Core MVC web application (no authentication), press F5 to run it inside IIS Express and I get this message:

The .csproj is a default one:

<Project ToolsVersion="15.0" Sdk="Microsoft.NET.Sdk.Web">
  <PropertyGroup>
    <OutputType>Exe</OutputType>
    <TargetFramework>netcoreapp1.0</TargetFramework>
    <PreserveCompilationContext>true</PreserveCompilationContext>
  </PropertyGroup>
  <PropertyGroup>
    <PackageTargetFallback>$(PackageTargetFallback);portable-net45+win8+wp8+wpa81;</PackageTargetFallback>
  </PropertyGroup>
  <ItemGroup>
    <PackageReference Include="Microsoft.NETCore.App" Version="1.0.1" />
    <PackageReference Include="Microsoft.AspNetCore.Diagnostics" Version="1.0.0" />
    <PackageReference Include="Microsoft.AspNetCore.Mvc" Version="1.0.1" />
    <PackageReference Include="Microsoft.AspNetCore.Routing" Version="1.0.1" />
    <PackageReference Include="Microsoft.AspNetCore.Server.IISIntegration" Version="1.0.0" />
    <PackageReference Include="Microsoft.AspNetCore.Server.Kestrel" Version="1.0.1" />
    <PackageReference Include="Microsoft.AspNetCore.StaticFiles" Version="1.0.0" />
    <PackageReference Include="Microsoft.Extensions.Configuration.EnvironmentVariables" Version="1.0.0" />
    <PackageReference Include="Microsoft.Extensions.Configuration.Json" Version="1.0.0" />
    <PackageReference Include="Microsoft.Extensions.Logging" Version="1.0.0" />
    <PackageReference Include="Microsoft.Extensions.Logging.Console" Version="1.0.0" />
    <PackageReference Include="Microsoft.Extensions.Logging.Debug" Version="1.0.0" />
    <PackageReference Include="Microsoft.Extensions.Options.ConfigurationExtensions" Version="1.0.0" />
    <PackageReference Include="Microsoft.VisualStudio.Web.BrowserLink.Loader" Version="14.0.0" />
  </ItemGroup>
</Project>

Running dotnet --version from the command line returns 1.0.0-preview4-004233.

I'm not sure if it's a valid thing to do, but if I change the output DLL's extension to exe and run it, I get a little bit more detail:

Unhandled Exception: System.IO.FileNotFoundException: Could not load file or assembly 'System.Runtime, Version=4.1.0.0, Culture=neutral, PublicKeyToken=b03f5f7f11d50a3a' or one of its dependencies. The system cannot find the file specified.
   at System.ModuleHandle.ResolveType(RuntimeModule module, Int32 typeToken, IntPtr* typeInstArgs, Int32 typeInstCount, IntPtr* methodInstArgs, Int32 methodInstCount, ObjectHandleOnStack type)

   at System.ModuleHandle.ResolveTypeHandleInternal(RuntimeModule module, Int32 typeToken, RuntimeTypeHandle[] typeInstantiationContext, RuntimeTypeHandle[] methodInstantiationContext)
   at System.Reflection.RuntimeModule.ResolveType(Int32 metadataToken, Type[] genericTypeArguments, Type[] genericMethodArguments)
   at System.Reflection.CustomAttribute.FilterCustomAttributeRecord(CustomAttributeRecord caRecord, MetadataImport scope, Assembly& lastAptcaOkAssembly, RuntimeModule decoratedModule, MetadataToken decoratedToken, RuntimeType attributeFilterType, Boolean mustBeInheritable, Object[] attributes, IList derivedAttributes, RuntimeType& attributeType, IRuntimeMethodInfo& ctor, Boolean& ctorHasParameters, Boolean& isVarArg)
   at System.Reflection.CustomAttribute.GetCustomAttributes(RuntimeModule decoratedModule, Int32 decoratedMetadataToken, Int32 pcaCount, RuntimeType attributeFilterType, Boolean mustBeInheritable, IList derivedAttributes, Boolean isDecoratedTargetSecurityTransparent)
   at System.Reflection.CustomAttribute.GetCustomAttributes(RuntimeAssembly assembly, RuntimeType caType)
   at System.Attribute.GetCustomAttributes(Assembly element, Type attributeType, Boolean inherit)
   at System.AppDomain.GetTargetFrameworkName()

However, installing System.Runtime NuGet package in this version does not help.

I also have Visual Studio 2015 with .NET Core tools installed on the same machine, could it be an issue?

How do I run ASP.NET Core web apps from VS 2017?