To solve this problem you must sum all the cups that Nancy used, as below:
You have that she used 1/4 cups of oil, 1 1/4 cups of water, and 2 cups of flour. Therefore, you have:
1/4 cups=0.25 cups
1 1/4 cups=1.25 cups
Then, when you sum:
0.25 cups+1.25 cups+2 cups=3.5 cups or 7/2 cups
Therefore, the answer is: 3.5 cups or 7/2 cups.