Hi Denise, Welcome to the EY site!
Most larger sailing sites (and this one!) will have multiple message threads about the anguish of choosing between a rebuild and a replacement, and the costs for either decision. (Worthless Trivia: I have always treasured the thought that I was the only sailor in my (small) circle that had even crewed on a boat with a Volvo gas engine, and that was a Ranger 29, from about he same era as your boat. In 1980, it ran perfectly, FWIW. )
I can give some perspective, and maybe a little advice... but it's only from my limited perspective.
Totally depending on the cost of parts, the old engine
may be cheaper to repair, and get you out on the water sooner. And part of that financial calculus is that as long as the present fuel system is in good working order, you *only* have to work on the engine.
If you choose to replace it, the only other engine that will "bolt in" will be a rebuilt one, same Volvo model. Finding one may be like seeking a hen's tooth, from a Swedish hen. (!)
IF you change to a diesel, there are excellent brand choices, and along with the larger $$ outlay to make the change your boat will have both a larger 'someday' resell market and will return some of the investment $ required to change to the diesel.
Just do not use the financial word "investment" for these types of expenditures. (sigh...)
I like to think in terms of "Ten Years" -- if making a major upgrade to our boat the update needs a decade of use (and fun) to amortize out. Every sailor looks at this differently.
Full disclosure: I replaced our original 1988 diesel engine two years ago, with a new Betamarine25. We enjoyed our boat with that engine since purchasing it in 1994. I figured that the old OEM Universal diesel engine owed me nothing.
I suspect that everyone sailing a boat from the 70's has to decide, sooner or later, whether a big repair or upgrade is worth doing when the bill is higher than the value of their boat. This is true whether it's a new drive train, or suite of sails, or a new mast and rig. Sometimes people just sigh loudly and part out the boat or sell it for a little cash on CraigsList.
Boats,, cars, airplanes..... all will collide with this financial decision barrier at some point.
Enough Philosophical Drivel. Unless the tank and fuel system has also been rebuilt in the last decade, just replace it all.
Betamarine is great, and so is Yanmar. BTW, in these pandemic times you may find some good discounts for both labor and parts by tactfully asking around.
Please keep us informed, and if you have some pix of the old engine (and your boat!) please post them.
Fair winds,
Loren