For two's complement, however, a simple binary adder will suffice. This allows the same adder to be used for unsigned arithmetic as for signed. The same adder works for both interpretations of the numbers. Usually we set the Cin input of the low-order bit to zero. A sequential circuit using a ripple carry adder would have to have a clock long enough for this signal to settle, which depends on the word length.
V is two's complement overflow.
N is the value of the high-order bit, which means the result is negative. Z is the NOR of all the bits, meaning the value is zero. That is, we take the decimal digit, add 3, take its binary representation, and that's the excess-3 representation. If there is a single bit error anywhere in the 5 bits, the logic can find the error since it will be an illegal code. Two of five is used by the Post Office to represent ZIP codes in the little line strips that appear on the bottom of some envelopes.