You can, the engines are the same but you will have to remove some or all of the Merc rigging (ie engine coupler, exhaust system if the Merc exhaust elbows won't match up to the VP Y pipe, fuel pump possible, etc). Then there is the issue of the compatibility of the wiring harnesses given that the Merc engine is MPI. While the engines are identical in most cases, there are a lot of differences in the details that can be costly to convert over, esp since you are replacing a 4.3 with a V8, some parts will be different on the Volvo when changing from V6 to the V8. Also, the outdrive gear ratio is for a 4.3, this is going to put the V8 rpms above the level where they should be and this will limit your top speed although low speed acceleration should be very good. Not sure if you can compensate for that with a bigger (diameter and pitch) prop. It would have been easier if you replaced with the same size engine.
The easiest conversion is with the same size engine and simpler systems (ie carbs instead of MPI). With MPI then you have to have the right fuel pump, sensors and wiring harness. None of this is needed with a simple 4bbl carb.
Does the previous owner still have the old Volvo rigged 4.3? If so then you would find it much easier to get a reman or new 4.3 and transfer all the Volvo components to it. Less complex, less chance of problems, better resale down the line less to explain to prospective buyers why you have a franken boat.
