Prior to installing, I would like to verify whether it is possible to install the package in /drupal/modules instead of /drupal/sites/all/modules. All of my drupal modules presently exist in /drupal/modules and I am only running a single drupal installation. Is this OK?

Yes, CiviCRM can be installed in drupal/modules. Make sure all the settings are pointing to the right directory and things should work fine.

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