As others mentioned, my bread machine instructions suggest adding yeast as the last ingredient but it does mention that it's okay not to; that proofing the yeast will not affect the outcome. I'm not as experienced as some bakers here, but I have done dozens of loaves and was constantly experimenting with the bread machine. I found that using the machine as the kneading tool to produce a glob of dough and then transfer it to bread pans works best for me. I had developed my own recipe based on this one, some others on this site and other sites and ultimately from the results of my "what-ifs"
1/4 cup warm water
3/4 cup warm milk
1/3 cup white sugar
1 package active dry yeast (2-1/4 tspn)
1 egg, slightly beaten
1/3 cup butter, softened or liquid
3 3/4 cups all-purpose flour
1-1/2 teaspoon salt
Combining the warm water & milk with sugar and letting it sit for 10 min gets the yeast started really well. Subbing margarine or veggie oil for the butter works okay, but butter adds to the final flavor. I also add one egg which increases the total liquid content which is adjusted for with the increased flour. Let rise for an hour (ish) and bake at 400 F for 12-15 min -- OR let the bread machine do the baking.
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As others mentioned, my bread machine instructions suggest adding yeast as the last ingredient...